Advantage Solutions Inc. 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 59 Consolidated Balance Sheets 62 Consolidated Statements of Operations and Comprehensive Loss 63 Consolidated Statements of Stockholders’ Equity 64 Consolidated Statements of Cash Flows 65 Notes to Consolidated Financial Statements 66 Schedule I—Condensed Registrant Only Financial Information of Advantage Solutions Inc. as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023, and 2022 111 58 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Advantage Solutions Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Advantage Solutions Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 59 Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Interim and Annual Goodwill Impairment Assessments – Certain Reporting Units As described in Notes 1 and 3 to the consolidated financial statements, the Company’s goodwill balance was $477.0 million as of December 31, 2024, the majority of which related to the Branded Agencies, Experiential Services, Branded Services, and Merchandising reporting units. Management tests its goodwill for impairment at the beginning of the fourth quarter of a given fiscal year and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value. When it is determined that a quantitative impairment test should be performed, if the fair value of the reporting unit is less than its carrying amount, goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment loss; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Management utilizes a combination of income and market approaches to estimate the fair value of its reporting units. The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units' revenue growth rates, earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, terminal growth rates, capital cost expenditures as a percentage of revenue, discount rates, and incremental net working capital, all of which require significant management judgment. The market approach applies market multiples derived from the historical earnings data of selected guideline publicly-traded companies to the Company’s reporting units’ businesses and acquisition premiums of similar businesses involved in recent merger and acquisition transactions, which requires significant management judgment. Effective January 1, 2024, the Company revised its reportable segments and performed an interim impairment assessment for its five reporting units’ goodwill, which did not result in an impairment charge. During the second quarter of fiscal year 2024, management determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill, resulting in a goodwill impairment charge of $99.7 million. During the fourth quarter of fiscal year 2024, management determined a triggering event occurred and an impairment assessment was warranted for the Branded Services reporting unit goodwill, resulting in a goodwill impairment charge of $133.5 million. The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessments for the Branded Agencies, Experiential Services, and Branded Services reporting units, and the annual goodwill impairment assessments for the Branded Services and Merchandising reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, EBITDA margins, terminal growth rates, and discount rates used in the income approach and market multiples and acquisition premium used in the market approach, as applicable to the reporting unit; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Branded Agencies, Experiential Services, Branded Services, and Merchandising reporting units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the income and market approaches used by management; (iii) testing the completeness and accuracy of underlying data used in the approaches; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margins, terminal growth rates, and discount rates used in the income approach and market multiples and acquisition premium used in the market approach, as applicable to the reporting unit. Evaluating management’s assumptions related to revenue growth rates and EBITDA margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s income and market approaches and (ii) the reasonableness of the terminal growth rates, discount rates, market multiples, and acquisition premium assumptions, as applicable to the reporting unit. 60 Interim and Annual Indefinite-Lived Intangible Asset Impairment Assessments As described in Notes 1 and 3 to the consolidated financial statements, the Company’s indefinite-lived intangible asset balance was $609.5 million as of December 31, 2024, which relates to the Advantage trade name. Intangible assets with indefinite useful lives are not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if events occur or circumstances change that would create a triggering event. Management tests its indefinite-lived intangible asset for impairment using a relief from royalty method by comparing the estimated fair value of the indefinite-lived intangible asset with the carrying value. The estimates used in the determination of fair value involve the use of significant assumptions, including revenue growth rates, terminal growth rate, discount rate, and royalty rate, all of which require significant management judgment. During the fourth quarter of fiscal year 2024, management determined a triggering event occurred and an impairment assessment was warranted, resulting in an intangible asset impairment charge of $42.0 million. The principal considerations for our determination that performing procedures relating to the interim and annual indefinite-lived intangible asset impairment assessments is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the indefinite-lived intangible asset; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, discount rate, and royalty rate for the interim assessment, and discount rate and royalty rate for the annual assessment; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible asset impairment assessments. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the indefinite-lived intangible asset; (ii) evaluating the appropriateness of the relief from royalty method used by management; (iii) testing the completeness and accuracy of underlying data used in the relief from royalty method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, discount rates, and royalty rates. Evaluating management’s assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brand; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s relief from royalty method and (ii) the reasonableness of the discount rate and royalty rate assumptions. /s/ PricewaterhouseCoopers LLP Irvine, California March 7, 2025 We have served as the Company’s auditor since 2003. 61 ADVANTAGE SOLUTIONS INC. CONSOLIDATED BALANCE SHEETS December 31, (in thousands, except share data) 2024 2023 ASSETS Current assets Cash and cash equivalents $ 205,233 $ 120,839 Restricted cash 15,518 16,363 Accounts receivable, net of allowance for expected credit losses of $ 13,047 and $ 29,294 , respectively 603,069 659,499 Prepaid expenses and other current assets 86,918 115,921 Current assets of discontinued operations — 99,412 Total current assets 910,738 1,012,034 Property and equipment, net 97,763 64,708 Goodwill 477,021 710,191 Other intangible assets, net 1,332,578 1,551,828 Investments in unconsolidated affiliates 226,510 210,829 Other assets 61,907 43,543 Other assets of discontinued operations — 186,190 Total assets $ 3,106,517 $ 3,779,323 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 13,250 $ 13,274 Accounts payable 158,485 172,894 Accrued compensation and benefits 129,486 161,447 Other accrued expenses 134,677 144,415 Deferred revenues 24,164 26,598 Current liabilities of discontinued operations — 22,669 Total current liabilities 460,062 541,297 Long-term debt, net of current portion 1,686,690 1,848,118 Deferred income tax liabilities 146,889 204,136 Other long-term liabilities 64,141 74,555 Other liabilities of discontinued operations — 7,140 Total liabilities 2,357,782 2,675,246 Commitments and contingencies (Note 18) Equity attributable to stockholders of Advantage Solutions Inc. Preferred stock, no par value, 10,000,000 shares authorized; none issued and outstanding as of December 31, 2024 and 2023, respectively — — Common stock, $ 0.0001 par value, 3,290,000,000 shares authorized; 320,773,096 and 322,235,261 shares issued and outstanding as of December 31, 2024 and 2023, respectively 32 32 Additional paid in capital 3,466,221 3,449,261 Accumulated deficit ( 2,641,612 ) ( 2,314,650 ) Loans to Karman Topco L.P. ( 7,029 ) ( 6,387 ) Accumulated other comprehensive loss ( 15,861 ) ( 3,945 ) Treasury stock, at cost; 12,400,075 and 3,600,075 shares as of December 31, 2024 and 2023, respectively ( 53,016 ) ( 18,949 ) Total equity attributable to stockholders of Advantage Solutions Inc. 748,735 1,105,362 Nonredeemable noncontrolling interest — ( 1,285 ) Total stockholders' equity 748,735 1,104,077 Total liabilities and stockholders' equity $ 3,106,517 $ 3,779,323 See Notes to the Consolidated Financial Statements. 62 ADVANTAGE SOLUTIONS INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, (in thousands, except share and per share data) 2024 2023 2022 Revenues $ 3,566,324 $ 3,900,125 $ 3,646,342 Cost of revenues (exclusive of depreciation and amortization shown separately below) 3,059,052 3,415,046 3,173,493 Selling, general, and administrative expenses 324,596 250,235 175,360 Impairment of goodwill and indefinite-lived asset 275,170 43,500 1,572,523 Gain on deconsolidation of subsidiaries — ( 58,891 ) — Loss on divestitures — — 2,863 Depreciation and amortization 204,553 208,856 216,046 Income from equity method investments ( 2,064 ) (5,210 ) — Total operating expenses 3,861,307 3,853,536 5,140,285 Operating (loss) income from continuing operations ( 294,983 ) 46,589 ( 1,493,943 ) Other (income) expenses: Change in fair value of warrant liabilities ( 584 ) ( 286 ) ( 21,236 ) Interest expense, net 146,792 165,734 104,387 Total other expenses, net 146,208 165,448 83,151 Loss from continuing operations before income taxes ( 441,191 ) ( 118,859 ) ( 1,577,094 ) Benefit from income taxes from continuing operations ( 62,787 ) ( 37,648 ) ( 158,442 ) Net loss from continuing operations ( 378,404 ) ( 81,211 ) ( 1,418,652 ) Net income from discontinued operations, net of tax 53,634 20,829 41,350 Net loss ( 324,770 ) ( 60,382 ) ( 1,377,302 ) Less: net income from continuing operations attributable to noncontrolling interest, net of tax — 2,346 3,757 Less: net income (loss) from discontinued operations attributable to noncontrolling interest, net of tax 2,192 594 ( 546 ) Net loss attributable to stockholders of Advantage Solutions Inc. $ ( 326,962 ) $ ( 63,322 ) $ ( 1,380,513 ) Net loss per common share: Basic loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc. $ ( 1.18 ) $ ( 0.26 ) $ ( 4.46 ) Basic earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 0.16 $ 0.06 $ 0.13 Diluted net loss per share: Diluted loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc. $ ( 1.18 ) $ ( 0.26 ) $ ( 4.46 ) Diluted earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 0.16 $ 0.06 $ 0.13 Weighted-average number of common shares: Basic 321,515,982 323,677,515 318,682,548 Diluted 321,515,982 323,677,515 318,682,548 Net loss attributable to stockholders of Advantage Solutions Inc. $ ( 326,962 ) $ ( 63,322 ) $ ( 1,380,513 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments ( 9,485 ) 5,817 ( 14,370 ) Total comprehensive loss attributable to stockholders of Advantage Solutions Inc. $ ( 336,447 ) $ ( 57,505 ) $ ( 1,394,883 ) See Notes to the Consolidated Financial Statements. 63 ADVANTAGE SOLUTIONS INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Accumulated Advantage Additional Other Solutions Inc. Total Common Stock Treasury Stock Paid-in Accumulated Loans to Comprehensive Stockholders' Noncontrolling Stockholders' (in thousands, except share data) Shares Amount Shares Amount Capital Deficit Topco Income (Loss) Equity Interest Equity Balance at January 1, 2022 316,963,552 $ 32 1,610,014 $ ( 12,567 ) $ 3,373,278 $ ( 866,607 ) $ ( 6,340 ) $ ( 4,479 ) $ 2,483,317 $ 97,084 $ 2,580,401 Comprehensive loss Net (loss) income — — — — — ( 1,380,502 ) — — ( 1,380,502 ) 2,995 ( 1,377,507 ) Foreign currency translation adjustments — — — — — — — ( 14,370 ) ( 14,370 ) ( 4,526 ) ( 18,896 ) Total comprehensive loss — — — — — — — — ( 1,394,872 ) ( 1,531 ) ( 1,396,403 ) Interest on loans to Karman Topco L.P. — — — — — — ( 23 ) — ( 23 ) — ( 23 ) Increase in noncontrolling interest — — — — — — — — — 6,191 6,191 Equity-based compensation of Karman Topco L.P. — — — — ( 6,934 ) — — — ( 6,934 ) — ( 6,934 ) Shares issued under 2020 Employee Stock Purchase Plan 713,213 — — — 3,320 — — — 3,320 — 3,320 Shares issued under 2020 Incentive Award Plan 2,013,535 — — — — — — — — — — Stock-based compensation expense — — — — 39,172 — — — 39,172 — 39,172 Balance at December 31, 2022 319,690,300 $ 32 1,610,014 $ ( 12,567 ) $ 3,408,836 $ ( 2,247,109 ) $ ( 6,363 ) $ ( 18,849 ) $ 1,123,980 $ 101,744 $ 1,225,724 Comprehensive (loss) income Net (loss) income — — — — — ( 63,258 ) — — ( 63,258 ) 2,639 ( 60,619 ) Foreign currency translation adjustments — — — — — — — 5,817 5,817 3,201 9,018 Total comprehensive (loss) income — — — — — — — — ( 57,441 ) 5,840 ( 51,601 ) Interest on loans to Karman Topco L.P. — — — — — — ( 24 ) — ( 24 ) — ( 24 ) Purchase of treasury stock ( 4,164,010 ) — 4,164,010 ( 10,665 ) — — — — ( 10,665 ) — ( 10,665 ) Retirement of shares — — ( 2,173,949 ) 4,283 — ( 4,283 ) — — — — - Equity-based compensation of Karman Topco L.P. — — — — ( 2,524 ) — — — ( 2,524 ) — ( 2,524 ) Shares issued under 2020 Employee Stock Purchase Plan 1,241,440 — — — 2,248 — — — 2,248 — 2,248 Shares issued under 2020 Incentive Award Plan and tax related to net share settlement 5,467,531 — — — ( 1,880 ) — — — ( 1,880 ) — ( 1,880 ) Stock-based compensation expense — — — — 42,581 — — — 42,581 — 42,581 Deconsolidation of subsidiaries — — — — — — — 9,087 9,087 ( 108,869 ) ( 99,782 ) Balance at December 31, 2023 322,235,261 $ 32 3,600,075 $ ( 18,949 ) $ 3,449,261 $ ( 2,314,650 ) $ ( 6,387 ) $ ( 3,945 ) $ 1,105,362 $ ( 1,285 ) $ 1,104,077 Comprehensive (loss) income Net (loss) income — — — — — ( 326,962 ) — — ( 326,962 ) 2,192 ( 324,770 ) Foreign currency translation adjustments — — — — — — — ( 9,485 ) ( 9,485 ) 73 ( 9,412 ) Total comprehensive (loss) income — — — — — — — — ( 336,447 ) 2,265 ( 334,182 ) Interest on loans to Karman Topco L.P. — — — — — — ( 642 ) — ( 642 ) — ( 642 ) Purchase of treasury stock ( 8,800,000 ) — 8,800,000 ( 34,067 ) — — — — ( 34,067 ) — ( 34,067 ) Equity-based compensation of Karman Topco L.P. — — — — 723 — — — 723 — 723 Shares issued under 2020 Employee Stock Purchase Plan 983,808 — — — 2,294 — — — 2,294 — 2,294 Payments for taxes related to net share settlement under 2020 Incentive Award Plan — — — — ( 12,765 ) — — — ( 12,765 ) — ( 12,765 ) Shares issued under 2020 Incentive Award Plan 6,354,027 — — — — — — — — — — Sale of a business — — — — — — — ( 2,431 ) ( 2,431 ) ( 980 ) ( 3,411 ) Stock-based compensation expense — — — — 26,708 — — — 26,708 — 26,708 Balance at December 31, 2024 320,773,096 $ 32 12,400,075 $ ( 53,016 ) $ 3,466,221 $ ( 2,641,612 ) $ ( 7,029 ) $ ( 15,861 ) $ 748,735 $ — $ 748,735 See Notes to Consolidated Financial Statements. 64 ADVANTAGE SOLUTIONS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (in thousands) 2024 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from continuing operations $ ( 378,404 ) $ ( 81,211 ) $ ( 1,418,652 ) Adjustments to reconcile net loss to net cash provided by operating activities Non-cash interest expense (income) 5,227 ( 7,728 ) ( 43,810 ) Deferred financing fees related to repricing of long-term debt 1,079 — — Amortization of deferred financing fees 6,766 8,292 8,860 Impairment of goodwill and indefinite-lived asset 275,170 43,500 1,572,523 Depreciation and amortization 204,553 208,856 216,046 Change in fair value of warrant liability ( 584 ) ( 286 ) ( 21,236 ) Fair value adjustments related to contingent consideration 1,678 11,152 6,572 Deferred income taxes ( 57,307 ) ( 80,416 ) (190,754 ) Equity-based compensation of Karman Topco L.P. 723 ( 2,524 ) ( 6,934 ) Stock-based compensation 31,019 38,933 35,101 Income from equity method investments ( 2,064 ) (5,511 ) (10,609 ) Distribution received from equity method investments 3,289 2,100 1,826 Gain on deconsolidation of subsidiaries — ( 58,891 ) — Gain on repurchases of Senior Secured Notes and Term Loan Facility debt ( 9,141 ) ( 8,665 ) — Loss on disposal of property and equipment 1,274 3,318 644 Loss on divestiture — — 2,863 Changes in operating assets and liabilities, net of effects from divestitures: Accounts receivable, net 51,154 38,899 ( 85,737 ) Prepaid expenses and other assets 28,396 100,841 15,051 Accounts payable ( 12,918 ) ( 23,066 ) ( 14,164 ) Accrued compensation and benefits ( 30,380 ) 27,458 17,854 Deferred revenues ( 2,129 ) 8,551 ( 10,930 ) Other accrued expenses and other liabilities ( 24,306 ) 4,890 30,191 Net cash provided by operating activities 93,095 228,492 104,705 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of businesses, net of cash acquired — — ( 74,206 ) Purchase of investments in unconsolidated affiliates ( 13,932 ) ( 3,023 ) ( 775 ) Purchase of property and equipment ( 7,838 ) ( 20,691 ) ( 12,351 ) Purchase of capitalized software ( 47,501 ) ( 20,872 ) ( 20,664 ) Proceeds from divestitures, net of cash 275,717 21,108 1,896 Deconsolidation of subsidiaries cash and cash equivalents and restricted cash, net of proceeds — ( 31,465 ) — Proceeds from sale of investments in unconsolidated affiliates — 4,428 — Net cash provided by (used in) investing activities 206,446 ( 50,515 ) ( 106,100 ) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under lines of credit — 99,538 326,090 Payments on lines of credit — ( 99,102 ) ( 326,968 ) Principal payments on long-term debt ( 13,131 ) ( 13,294 ) ( 13,293 ) Repurchases of Senior Secured Notes and Term Loan Facility debt ( 147,122 ) ( 156,559 ) — Debt issuance costs ( 971 ) — — Proceeds from issuance of common stock 2,294 2,248 3,320 Payments for taxes related to net share settlement under 2020 Incentive Award Plan ( 12,765 ) ( 1,880 ) — Contingent consideration payments ( 5,655 ) ( 1,867 ) ( 13,002 ) Holdback payments — ( 944 ) ( 11,057 ) Financing fees paid — — ( 1,464 ) Contribution from noncontrolling interest — — 5,217 Redemption of noncontrolling interest — ( 154 ) ( 224 ) Purchase of treasury stock ( 34,067 ) ( 6,382 ) — Net cash used in financing activities ( 211,417 ) ( 178,396 ) ( 31,381 ) Net effect of foreign currency changes on cash, cash equivalents and restricted cash ( 4,575 ) 1,800 ( 7,872 ) Net change in cash, cash equivalents and restricted cash 83,549 1,381 ( 40,648 ) Cash, cash equivalents and restricted cash, beginning of period 137,202 135,821 176,469 Cash, cash equivalents and restricted cash, end of period $ 220,751 $ 137,202 $ 135,821 See Notes to the Consolidated Financial Statements. 65 ADVANTAGE SOLUTIONS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Significant Accounting Policies On July 25, 2014, Karman Topco L.P. (“Topco”) completed the acquisition (the “2014 Topco Acquisition”) of Advantage Sales & Marketing Inc., which became a wholly owned indirect subsidiary of Topco. The equity units of Topco are held by equity funds affiliated with or advised by CVC Capital Partners, Leonard Green & Partners, Juggernaut Capital Partners, Centerview Capital, L.P., and Bain Capital. On September 7, 2020, Topco and one of its subsidiaries entered into an agreement and plan of merger (as amended, modified, supplemented or waived, the “Merger Agreement”), with Conyers Park II Acquisition Corp., a Delaware corporation, now known as Advantage Solutions Inc. (“Conyers Park”), CP II Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Conyers Park. On October 28, 2020, Conyers Park consummated the merger pursuant to the Merger Agreement, and became a majority-owned subsidiary of Topco and changed its name to Advantage Solutions Inc. (the “Company” or “Advantage”). The Company is headquartered in Clayton, Missouri, in the St. Louis-metropolitan area, and is a business solutions provider to consumer goods companies and retailers. The Company’s common stock and public warrants (as further described in Note 13 — Equity ) are listed on the Nasdaq Global Select Market under the symbol “ADV” and warrants to purchase the common stock at an exercise price of $ 11.50 per share are listed on the Nasdaq Global Select Market under the symbol “ADVWW”. Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its controlled subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The financial information set forth herein reflects: (a) the Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statements of Stockholders’ Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 and (b) the Consolidated Balance Sheets as of December 31, 2024 and 2023. The consolidated financial statements for the years ended December 31, 2024, 2023 , and 2022 reflect Topco’s basis in the assets and liabilities of the Company, as a result of the 2014 Topco Acquisition. The Company’s share in the earnings or losses for its investments in affiliates is reflected in “Investments in unconsolidated affiliates” and “Income from equity method investments” in the Consolidated Balance Sheets and Consolidated Statements of Operations and Comprehensive Loss, respectively. All intercompany balances and transactions have been eliminated upon consolidation. Discontinued Operations The Company presents discontinued operations when there is a disposal of a component or a group of components that represents a strategic shift that will have a major effect on operations and financial results. The results of discontinued operations are reported in net income (loss) from discontinued operations in the consolidated statements of operations for all periods presented, commencing in the period in which the business is either disposed of or is classified as held for sale, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less costs to sell. Assets and liabilities related to a business classified as held for sale or meets the criteria for discontinued operations are segregated in the consolidated balance sheets for the current and prior periods presented. Cash flows for continuing and discontinued operations are segregated in the consolidated statements of cash flows for the current and prior periods. When proceeds are not utilized to paydown long-term debt, the assets and liabilities associated with discontinued operations in the current period balance sheet are classified as current. Certain prior period balances related to the Company's reportable segments and discontinued operations have been reclassified to conform to the current presentation in the consolidated financial statements and accompanying notes. The notes to the consolidated financial statements are presented on a continuing operations basis unless otherwise noted. Refer to Note 17— Operating Segments and Geographic Information for additional information on the Company’s reportable segments. Refer to Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions for additional information on the Company’s discontinued operations. 66 Change in Reportable Segments Effective January 1, 2024, Advantage Solutions Inc. revised its reportable segments to align with the Company's business strategy, and the manner in which the Chief Executive Officer, the Company's chief operating decision maker (“CODM”), assesses performance and makes decisions regarding the allocation of resources for the Company. The Company’s revised operating and reportable segments consist of Branded Services, Experiential Services, and Retailer Services. This change had no impact on the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statements of Stockholders' Equity and Consolidated Statements of Cash Flows. Prior period segment results have been reclassified to reflect the Company’s new reportable segments on a continuing operations basis. When evaluating the Company’s financial performance, the CODM regularly reviews revenues, compensation and benefits, reimbursable expenses and other segment items. Refer to Note 17— Operating Segments and Geographic Information for additional information on the Company’s reportable segments. Deconsolidation of European Joint Venture On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited (“ASL” ), its European joint venture, from a majority interest to a minority interest of 49.6 %. The Company also removed certain participating rights with ASL related to capital allocation and certain of the Company’s decision making rights, resulting in a loss of control. Therefore, in accordance with Accounting Standards Codification 810 ( “ASC 810”), Consolidation , ASL was deconsolidated from the Company’s consolidated financial statements resulting in the recognition of a $ 58.9 million gain for the year ended December 31, 2023. Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income reported in “Income from equity method investments” on the Consolidated Statements of Operations and Comprehensive Loss. Reclassifications The Company has reclassified certain amounts on the consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements of cash flows and in Note 17— Operating Segments and Geographic Information to conform to current period presentation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. The Company’s estimates primarily include revenues, workers’ compensation and employee medical claim reserves, fair value of contingent consideration, leases, income taxes, derivative instruments and fair value considerations in applying purchase accounting and assessing goodwill and other asset impairments. Foreign Currency The Company’s reporting currency is U.S. dollars as that is the currency of the primary economic environment in which the Company operates. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are included in “Accumulated other comprehensive loss” in the Consolidated Statements of Stockholders’ Equity. Transactions in foreign currencies other than the entities’ functional currency are converted using the rate of exchange at the date of transaction. The gains or losses arising from the revaluation of foreign currency transactions to functional currency are included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future) are also recorded in Accumulated other comprehensive loss in stockholders’ equity. The Company reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are of a long-term investment nature, in “Other comprehensive loss” in the Consolidated Statements of Operations and Comprehensive Loss. These items represented a net loss of $ 0.1 million, a gain of $ 0.1 million, and a gain of $ 7.6 million during the years ended December 31, 2024, 2023 , and 2022, respectively. 67 Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents include cash on hand and highly liquid investments having an original maturity of three months or less. The Company’s investments consist primarily of U.S. Treasury securities. The Company’s investments are carried at cost, which approximates fair value. The Company has restricted cash related to funds received from clients that will be disbursed at the direction of those clients. Corresponding liabilities have been recorded in “Other accrued expenses” in the Consolidated Balance Sheets. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Company’s Consolidated Statements of Cash Flows: December 31, (in thousands) 2024 2023 2022 Cash and cash equivalents $ 205,233 $ 120,839 118,004 Restricted cash 15,518 16,363 17,817 Total cash, cash equivalents and restricted cash $ 220,751 $ 137,202 $ 135,821 The following table provides supplemental disclosure of cash flow information: Year Ended December 31, (in thousands) 2024 2023 2022 SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES Exchange of ownership of Partnership SPV 1 Limited for fair value of GSH $ — $ 15,854 $ — Non-cash proceeds from divestitures $ 45,056 $ 4,283 $ — Purchases of property and equipment recorded in accounts payable and accrued expenses $ 114 $ 1,201 $ 842 Purchases of capitalized software recorded in accounts payable and accrued expenses $ 7,272 $ — $ — SUPPLEMENTAL CASH FLOW INFORMATION Gain (loss) on divestitures from discontinued operations $ 95,099 $ ( 19,068 ) $ — Non-cash consideration for purchases of investments in unconsolidated affiliates $ 10,432 $ — $ — Cash payments for interest $ 163,202 $ 174,767 $ 126,560 Cash received from interest rate derivatives $ 30,824 $ 28,808 $ 6,527 Cash payments for income taxes, net $ 31,269 $ 39,007 $ 45,729 Accounts Receivable and Expected Credit Losses Accounts receivable consist of amounts due from clients for services provided in normal business activities and are recorded at invoiced amounts. The Company measures expected credit losses against certain billed receivables based upon the latest information regarding whether invoices are ultimately collectible. Assessing the collectability of client receivables requires management judgment. The Company determines its expected credit losses by specifically analyzing individual accounts receivable, historical bad debts, client creditworthiness, current economic conditions, and accounts receivable aging trends. Valuation reserves are periodically re-evaluated and adjusted as more information about the ultimate collectability of accounts receivable becomes available. Upon determination that a receivable is uncollectible, the receivable balance and any associated reserve is written off. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of accounts receivable and cash balances at various financial institutions. The Company maintains cash balances in accounts at various financial institutions. At times such cash balances may exceed federally insured limits. The Company has not experienced any losses in such accounts. Derivatives The Company uses financial instruments to hedge interest rate and foreign exchange risk. Derivative instruments, used to hedge interest rates, consist of interest rate swaps and interest rate collars and caps. Interest rate swap contracts involve the exchange of floating rate interest payment obligations for fixed interest rate payments without the exchange of the underlying principal amounts. Interest rate collar and cap contracts limit the floating interest rate exposure to the indicative rate in the agreement. Derivatives are initially recognized at fair value on the date a contract is entered into and are subsequently re-measured at fair value. The fair values of 68 derivatives are measured using observable market prices or, where market prices are not available, by using discounted expected future cash flows at prevailing interest and exchange rates. The Company does not designate these derivatives as hedges for accounting purposes, and as a result, all changes in the fair value of derivatives used to hedge interest rates and foreign exchange risk are recorded in “Interest expense, net” and in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss, respectively. Cash flows associated with such derivatives are reported in cash flows from operating activities in the Consolidated Statements of Cash Flows. These arrangements contain an element of risk in that the counterparties may be unable to meet the terms of such arrangements. In the event the counterparties are unable to fulfill their related obligations, the Company could potentially incur significant additional costs by replacing the positions at then current market rates. The Company manages its risk of exposure by limiting counterparties to those banks and institutions deemed appropriate by management. Property and Equipment Property and equipment are stated at cost, and the balances are presented net of accumulated depreciation. Leasehold improvements are amortized on a straight-line basis over the shorter of their respective lease terms or their respective estimated useful lives. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the Consolidated Balance Sheets and the resulting gain or loss is reflected in the “Cost of revenues” and “Selling, general, administrative expenses” within the Consolidated Statements of Operations and Comprehensive Loss, depending on the nature of the assets. Expenditures for maintenance and repairs are expensed as incurred, whereas expenditures for improvements and replacements are capitalized. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets. The following table provides the range of estimated useful lives used for each asset type: Leasehold improvements 3 — 10 years Furniture and fixtures 3 — 7 years Computer hardware and other equipment 3 — 5 years Software 3 — 7 years Internal-Use Software Development Costs The Company capitalizes certain direct costs associated with the development and purchase of internal-use software within property and equipment. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs are expensed as incurred. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding seven years . Maintenance and training costs are charged to expense as incurred and included in operating expenses. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments to capitalized internal-use software for the years ended December 31, 2024 and 2023. Equity Method Investments Investments in companies in which the Company exercises significant influence over the operating and financial policies of the investee and are not required to be consolidated are accounted for using the equity method. The Company’s proportionate share of the net income or loss of equity method investments is included in the results of operations and any dividends received reduce the carrying value of the investment. Gains and losses from changes in the Company’s ownership interests are recorded in results of operations until control is achieved. In instances in which a change in the Company’s ownership interest results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in the Consolidated Statements of Operations and Comprehensive Loss. Distributions received from unconsolidated entities that represent returns on the Company’s investment are reported as cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows. Cash distributions from unconsolidated entities that represent returns of the Company’s investment are reported as cash flows from investing activities. Business Combinations The Company accounts for business combinations using the acquisition method. Under this method, the purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of 69 acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. Factors giving rise to goodwill generally include assembled workforce, geographic presence, expertise, and synergies that are anticipated as a result of the business combination, including enhanced product and service offerings. The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and other estimates made by management. The Company adjusts the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as the Company obtains more information as to facts and circumstances existing at the acquisition date impacting asset valuations and liabilities assumed. Goodwill acquired in business combinations is assigned to the reporting unit expected to benefit from the combination as of the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. Divestitures The Company nets the proceeds from the divestitures of businesses with the carrying amount of the related net assets and liabilities and records a gain or loss in the Consolidated Statements of Operations and Comprehensive Loss. Any contingent payments that are potentially due to the Company as a result of these divestitures are recorded when it is probable that a significant reversal of such consideration will not occur, or in the case of a business, when such payments are realizable. For divestitures of businesses, the Company includes the relative fair value of goodwill associated with the businesses in the determination of the gain or loss on sale. Discontinued Operations The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. Assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets, and results of discontinued operations are reported as a separate component of net loss in the Consolidated Statements of Operations and Comprehensive Loss. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition. The Company tests for impairment of goodwill at the reporting unit level. The Company generally combines components that have similar economic characteristics, nature of services, types of clients, distribution methods and regulatory environment. The Company has five reporting units, Branded Services, Branded Agencies, Experiential Services, Merchandising and Retailer Agencies. The Company tests its goodwill for impairment at the beginning of the fourth quarter of a given fiscal year and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value. The Company has the option to perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value before performing a quantitative impairment test. To the extent that the qualitative approach indicates that it is more likely than not that the carrying amount is less than its fair value, the Company applies a quantitative approach. When it is determined that a quantitative impairment test should be performed, if the fair value of the reporting unit is less than its carrying amount, goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment loss; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company’s annual goodwill impairment assessment for each year is performed as of October 1. The Company utilizes a combination of income and market approaches to estimate the fair value of its reporting units. The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units’ revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, terminal growth rates, capital cost expenditures as a percentage of revenue, discount rates, and incremental net working capital, all of which require significant management judgment. The market approach applies market multiples derived from the historical earnings data of selected guideline publicly-traded companies to the Company’s reporting units’ businesses and acquisition premiums of similar businesses involved in recent merger and acquisition transactions, which requires significant management judgment. The guideline companies are first screened by industry group and then further narrowed based on the reporting units’ business descriptions, markets served, competitors, EBITDA margins and revenue size. Market multiples are then selected from within the range of these guideline companies’ multiples based on the subject reporting unit. The Company compares a weighted average of the output from the income and market approaches to the carrying value of each reporting unit. The Company also compares the aggregate estimated fair value of its reporting units to the estimated fair value of its total market capitalization. The assumptions in the income and market approach are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy (described in “Fair Value Measurements,” below). The Company based its fair value estimates on assumptions it believes to be reasonable but which are unpredictable and inherently uncertain. A change in these underlying assumptions would cause a change in the results of the tests and, 70 as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future. Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to the Company’s planned strategy, it may cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future. Effective January 1, 2024, the Company performed an interim impairment assessment for its five reporting units’ goodwill. E ach of the fair values for the reporting units tested were in excess of its carrying amount. The fair values of the Branded Agencies and Experiential Services reporting units exceeded their respective carrying values by less than 20 %. During the second quarter of fiscal year 2024, the Company determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill due to the pending sale of one of the businesses that comprised a substantial portion of the assets, liabilities and prospective cash flows of the Branded Agencies reporting unit. As a result of the impairment test performed, the Company recognized a goodwill impairment charge of $ 99.7 million related to the Company's Branded Agencies reporting unit goodwill for the year ended December 31, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss. As a result of this charge, an immaterial amount of goodwill remains in this reporting unit. In connection with the Company’s annual quantitative impairment test as of October 1, 2024, the Company concluded that the goodwill was not impaired as of October 1, 2024. Additionally, no triggering events were identified for the Branded Agencies, Experiential Services, Merchandising and Retailer Agencies reporting units through December 31, 2024. The fair values of the Branded Services, Branded Agencies and Merchandising reporting units exceeded their respective carrying values by less than 20 %. During the fourth quarter of fiscal year 2024, the Company identified a triggering event that required an impairment assessment of goodwill for the Branded Services reporting unit. The triggering event was due to the loss of clients and a reduction in the scope of client services as the Company’s clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate. As a result of the goodwill impairment test, the Company recognized a goodwill impairment charge of $ 133.5 million related to the Branded Services reporting unit during the year ended December 31, 2024. This charge is reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss. In connection with the Company's annual quantitative impairment test as of October 1, 2023, the Company concluded that the goodwill was not impaired as of October 1, 2023. The Company determined that no additional goodwill triggering events occurred through December 31, 2023. In connection with the Company's annual quantitative impairment test as of October 1, 2022, the Company recognized $722.7 million, $308.2 million and $336.6 million in impairment charges in the Branded Services, Experiential Services and Retailer Services segments, respectively, for the year ended December 31, 2022, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Company’s Consolidated Statements of Operations and Comprehensive Loss. While there was no single determinative event or factor, the consideration of the weight of evidence of several factors that culminated during the fourth quarter of 2022 led the Company to conclude that it was more likely than not that the fair value of the reporting units were below their carrying values. These factors included: (a) sustained decline in the Company’s share price; (b) challenges in the labor market and continued inflationary pressures; and (c) an increase to the discount rate as a result of the recent increases in interest rates which adversely affected the results of the quantitative impairment tests. The uncertainty and volatility in the economic environment in which the Company operates could have an impact on the Company's future growth and could result in future impairment charges. There is no assurance that actual future earnings, cash flows or other assumptions for the reporting units will not significantly decline from these projections. Indefinite Lived Intangible Asset The Company’s indefinite-lived intangible asset is the Advantage Trade Name. Prior to the segment change, the Company went to market with the Advantage Trade Name being specifically used and assessed for impairment in the Sales and Marketing businesses. As a result of the change in the Company's reportable segments effective as of January 1, 2024, the Company determined, based on the change in the planned use of the Advantage Trade Name intangible asset, that the Advantage Trade Name should be considered an entity-wide asset for reporting and impairment testing purposes. Intangible assets with indefinite useful lives are not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if events occur or circumstances change that would create a triggering event. The Company has the option to perform a qualitative assessment of whether it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying value before performing a quantitative impairment test. The Company tests its indefinite-lived intangible assets for impairment using a relief from royalty method by comparing the estimated fair value of the indefinite-lived intangible asset with the carrying value. The estimates used in the determination of fair value are subjective in nature and involve the use of significant assumptions. These estimates and assumptions include revenue growth rates, 71 terminal growth rate, discount rate and royalty rate, all of which require significant management judgment. The assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The Company based its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from the estimates. As of January 1, 2024, the Company concluded there was a triggering event for an interim impairment assessment due to the change in unit of account of the indefinite-lived intangible asset. Based on the interim impairment assessment, the estimated fair value exceeded the carrying value by approximately 6 %, thus no impairment was recorded. In connection with the Company’s annual quantitative impairment test as of October 1, 2024, the Company concluded that the indefinite-lived intangible asset was not impaired. During the fourth quarter of fiscal year 2024, the Company recognized an intangible asset impairment charge of $42.0 million as a result of the triggering event for the Branded Services reporting unit. In connection with the Company’s annual quantitative impairment test as of October 1, 2023, the Company concluded that the indefinite-lived intangible asset was not impaired. During the fourth quarter of 2023, the Company determined a triggering event occurred and an impairment assessment was warranted due to the deconsolidation of the Company’s European joint venture and the planned divestitures of a collection of foodservice businesses, which was determined to be held for sale. As a result, the Company recognized an intangible asset impairment charge of $ 43.5 million related to the Advantage Trade Name during the year ended December 31, 2023, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss. In connection with the Company's annual quantitative impairment test as of October 1, 2022, the Company concluded the carrying value of the Advantage Trade Name exceeded its estimated fair value. As a result, the Company recognized an intangible asset impairment charge of $ 205.0 million related to the Company’s indefinite-lived trade name, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Company’s Consolidated Statements of Operations and Comprehensive Loss. While there was no single determinative event or factor, the factors that led to the impairment were the same circumstances outlined in the goodwill fiscal year 2022 impairment discussion above. Long-Lived Assets Long-lived assets to be held and used, including finite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the assets are impaired, the impairment recognized is measured as the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. No impairment related to the Company’s long-lived assets was recorded during the years ended December 31, 2024, 2023 , and 2022. Contingent Consideration Certain of the Company’s acquisitions include contingent consideration arrangements, which are generally based on the achievement of future financial performance. If it is determined the contingent consideration arrangements are not compensatory, the fair values of these contingent consideration arrangements are included as part of the purchase price of the acquisitions or divestitures on their respective transaction dates. For each transaction, the Company estimates the fair value of contingent consideration payments as part of the initial purchase price and records the estimated fair value of contingent consideration related to proceeds from divestitures as an asset in “Other assets” or related to purchases of businesses as a liability in “Other accrued expenses” or “Other long-term liabilities” in the Consolidated Balance Sheets. The Company reviews and assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from these initial estimates. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. 72 The portion of the cash settlement up to the acquisition date fair value of the contingent consideration is classified as “Contingent consideration payments” in cash flows from financing activities, and amounts paid in excess of the acquisition date fair value are classified as “Other accrued expenses and other liabilities” in cash flows from operating activities in the Consolidated Statements of Cash Flows. Leases The Company has obligations under various real estate leases, equipment leases, and software license agreements. The Company assesses whether these arrangements are or contain leases at lease inception. Classification of the leases between financing and operating leases is determined by assessing whether the lease transfers ownership of the asset to the Company, the lease grants an option for the Company to purchase the underlying asset, the lease term is for the majority of the asset’s remaining economic life, or if the minimum lease payments equal or substantially exceed all of the leased asset’s fair market value. As of December 31, 2024, the Company's finance leases were not material. Refer to Note 9— Leases , for further information regarding the Company’s operating leases. Self-Insurance Liability The Company maintains a high deductible program for workers’ compensation claims. Losses and liabilities relating to workers’ compensation claims and employee medical claims are fully insured beyond the Company’s deductible limits. The Company’s estimated liabilities are not discounted and are based on information provided by third party administrators, combined with management’s judgment regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation and claims settlement practices. Restructuring The Company's restructuring charges consist of employee severance, one-time termination benefits and ongoing benefits related to the reduction of its workforce, and other exit and disposal costs. One-time termination benefits are expensed at the date the Company notifies the employee, unless the employee must provide future service beyond a minimum retention period, in which case the benefits are expensed ratably over the future service period. Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable. During fiscal year 2024, the Company implemented restructuring plans including a Voluntary Early Retirement Program (“VERP”) and a cost savings program to improve operational performance and align cost structures consistent with revenue levels associated with business changes, which includes special termination benefits associated with a reduction-in-force (“2024 RIF”). The Company’s restructuring charges consist of settlement charges and special termination benefits associated with the VERP and 2024 RIF. One-time termination benefits are expensed at the time the VERP participants accept the offer or the Company notifies the 2024 RIF participants, and the amounts can be reasonably estimated. Liabilities for costs associated with the restructuring activities are measured at fair value and are recognized when the liability is incurred. See to Note 7— Restructuring , for further information regarding the Company’s restructuring activities. Revenue Recognition The Company recognizes revenue when control of promised goods or services are transferred to the client in an amount that reflects the consideration that the Company expects to be entitled to in exchange for such goods or services. Substantially all of the Company’s contracts with clients involve the transfer of a service to the client, which represents a performance obligation that is satisfied over time because the client simultaneously receives and consumes the benefits of the services provided. In most cases, the contracts consist of a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). For these contracts, the Company allocates the ratable portion of the consideration based on the services provided in each period of service to such period. Revenues related to the Branded Services segment are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing headquarter relationship management, execution of merchandising strategies and omni-commerce marketing services. Revenues within the Branded Services segment are further disaggregated between brokerage services, branded merchandising services, omni-commerce marketing services, and revenues related to the Company's European joint venture (prior to the deconsolidation during fiscal year 2023). Brokerage services revenues are primarily outsourced sales and services for branded consumer goods manufacturers at retailer headquarters, in-store and online. Branded merchandising services relate to merchandising in-store and online for branded consumer goods manufacturers. Omni-commerce marketing services primarily relate to digital and field marketing services. 73 Experiential Services segment revenues are primarily recognized in the form of fee-for-service and cost-plus fees for providing in-store, digital sampling and demonstrations, where the Company manages highly customized, large-scale sampling programs for leading brands and retailers. Retailer Services segment revenues are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing consulting services related to private brand development, the execution of merchandising strategies and marketing strategies within retailer locations, including retail media networks and analyzing shopper behavior. Revenues within the Retailer Services segment are further disaggregated between advisory services, retailer merchandising services and agency services to retailers. Advisory services primarily consist of consulting services related to private brand development. Retailer merchandising services primarily relate to the execution of merchandising strategies. Agency services primarily consist of providing marketing strategies within retail locations. Disaggregated revenues were as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Branded Services Brokerage services $ 495,302 $ 534,670 $ 554,226 Branded merchandising services 428,821 444,859 429,873 Omni-commerce marketing services 382,213 404,522 408,494 European joint venture — 374,366 371,483 Total Branded Services revenue $ 1,306,336 $ 1,758,417 $ 1,764,076 Experiential Services Experiential services $ 1,295,029 $ 1,159,449 $ 904,230 Total Experiential Services revenue $ 1,295,029 $ 1,159,449 $ 904,230 Retailer Services Retail merchandising services $ 701,709 $ 714,052 $ 712,189 Advisory services 197,506 207,675 217,992 Agency services 65,744 60,532 47,855 Total Retailer Services revenue $ 964,959 $ 982,259 $ 978,036 Total revenues $ 3,566,324 $ 3,900,125 $ 3,646,342 The Company is party to certain client contracts that include variable consideration, whereby the ultimate consideration is contingent on future events such as the client’s sales to retailers, hours worked, event count, costs incurred, and performance incentive bonuses. For commission-based service contracts, the consideration received from the client is variable because the Company earns an agreed upon percentage of the client’s sales to retailers, which is agreed upon on a manufacturer-by-manufacturer basis. Revenues are recognized for the commission earned during the applicable reporting period. The Company generally earns commission revenues from headquarter relationship management, analytics, insights and intelligence, e-commerce, administration, private label development and retail services arrangements. As part of these arrangements, the Company provides a variety of services to consumer goods manufacturers in order to improve the manufacturer’s sales at retailers. This includes primarily outsourced sales, business development, category and space management, relationship management, and sales strategy services. In exchange for these services, the Company earns an agreed upon percentage of its client’s sales to retailers, which is agreed upon on a manufacturer-by-manufacturer basis. For service contracts whereby the client is charged a fee per hour incurred or fee per event completed, revenues are recognized over time as actual hours are incurred or as events are completed, respectively. For service contracts with a cost-plus arrangement, revenues are recognized on a gross basis over time for a given period based on the actual costs incurred plus a fixed mark-up fee that is negotiated on a client-by-client basis. For certain contracts with clients, the Company is entitled to additional fees upon meeting specific performance goals or thresholds, which are referred to as bonus revenues. Bonus revenues are estimated and are recognized as revenues as the related services are performed for the client. The variability of the consideration for the services transferred during a reporting period is typically resolved by the end of the reporting period. However, for certain client contracts, the Company is required to estimate the variable consideration for the services that have been transferred to the client during the reporting period. The Company typically estimates the variable consideration based on the expected value method. Estimates are based on historical experience and current facts known during the reporting period. The 74 Company only recognizes revenues related to variable consideration if it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. When such probable threshold is not satisfied, the Company will constrain some or all of the variable consideration and the constrained variable consideration will not be recognized as revenues. The Company records an adjustment to revenue for differences between estimated revenues and the amounts ultimately invoiced to the client. Adjustments to revenue during the current period related to services transferred during prior periods were not material during the years ended December 31, 2024, 2023, and 2022. The Company has contracts that include fixed consideration such as a fee per project or a fixed monthly fee. For contracts with a fee per project, revenues are recognized over time using an input method such as hours worked that reasonably depicts the Company’s performance in transferring control of the services to the client. The Company determined that the input method represents a reasonable method to measure the satisfaction of the performance obligation to the client. For contracts with a fixed monthly fee, revenues are recognized using a time-based measure resulting in straight-line revenue recognition. A time-based measure was determined to represent a reasonable method to measure the satisfaction of the performance obligation to the client because the Company has a stand ready obligation to make itself available to provide services upon the client’s request or the client receives the benefit from the Company’s services evenly over the contract period. The Company evaluates each client contract individually in accordance with the applicable accounting guidance to determine whether the Company acts as a principal (whereby the Company would present revenues on a gross basis), or as an agent (whereby the Company would present revenues on a net basis). While the Company primarily acts as a principal in its arrangements and reports revenues on a gross basis, the Company will occasionally act as an agent and accordingly presents revenues on a net basis. Substantially all of the Company’s contracts with its clients either have a contract term that is less than one year with options for renewal and/or can be canceled by either party upon 30 to 120 days’ notice. For the purpose of disclosing the transaction price allocated to remaining unsatisfied performance obligations or partially satisfied performance obligations, the Company elected policies to: (1) exclude contracts with a contract term of one year or less and (2) exclude contracts with variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation when that performance obligation qualifies as a series of remaining performance obligations. After applying these policy elections, the Company determined that it does not have a significant amount of fixed consideration allocated to remaining performance obligations for contracts with a contract term that exceeds one year. When the Company satisfies its performance obligation and recognizes revenues accordingly, the Company has a present and unconditional right to payment and records the receivable from clients in “Accounts receivable” in the Consolidated Balance Sheets. The Company’s general payment terms are short-term in duration and the Company does not adjust the promised amount of consideration for the effects of a significant financing component. Contract liabilities represent deferred revenues which are cash payments that are received in advance of the Company’s satisfaction of the applicable obligation(s) and are included in “Deferred revenues” in the Consolidated Balance Sheets. Deferred revenues are recognized as revenues when the related services are performed for the client. Revenues recognized during the years ended December 31, 2024, 2023 , and 2022, included $ 19.4 million, $ 17.6 million, and $ 29.4 million of deferred revenues from the respective prior years. Income Taxes The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The income tax provision (benefit) is computed on the pre-tax income (loss) of the entities located within each taxing jurisdiction based on current tax law. A valuation allowance for deferred tax assets is recorded to the extent that the ultimate realization of the deferred tax assets is not considered more likely than not. Realization of the Company’s deferred tax assets is principally dependent upon its achievement of future taxable income, the estimation of which requires significant management judgment. These judgments regarding future profitability may change due to many factors, including future market conditions and the Company’s ability to successfully execute its business plans. These changes, if any, may require adjustments to deferred tax asset balances and deferred income tax expense. 75 Equity-based Compensation The Company measures the cost of non-employee services received in exchange for an award of equity instruments based on the measurement date fair value consistent with the vesting of the awards and measuring the fair value of these units at the end of each measurement period. The cost is recognized over the requisite service period. The Company’s equity-based compensation is based on grant date fair value. Stock-based Compensation Stock-based compensation costs related to stock options granted to employees are measured at the date of grant based on the estimated fair value of the award. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The fair value for stock-settled restricted stock units (“RSUs”) and performance stock units (“PSUs”) are based on the Company’s stock price on the date of grant. The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. The assumptions used in the Company's option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, so that they are inherently subjective. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. These assumptions are estimated as follows: • Fair Value of Common Stock . Represents the publicly quoted price as the fair value of ADV common stock. • Risk-Free Interest Rate . The Company based the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent term of options for each option group. • Expected Term . The expected term represents the period that the stock-based awards are expected to be outstanding. Because of the limitations on the sale or transfer or the Company's common stock as a previously privately held company, the Company does not believe its historical exercise pattern for similar awards is indicative of the pattern the Company will experience as a publicly traded company. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. • Volatility . Management determined the price volatility factor based on the historical volatilities of a relevant peer group as the Company did not have a sufficient trading history of common stock. Industry peers consist of several public companies that provide similar services with comparable characteristics including enterprise value, risk profiles and position within the industry. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company's own common stock share price becomes available, or unless circumstances change such that the identified companies are no longer similar, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. • Dividend Yield . The expected dividend assumption is based on expectations about the Company's anticipated dividend policy. The Company currently does not expect to issue any dividends. The Company recognizes compensation costs for awards with service vesting conditions on an accelerated method under the graded vesting method over the requisite service period of the award, which is generally the vesting term of three years. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging . The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s Common Stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and on the date of issuance and for liability-classified awards, remeasured to fair value at each balance sheet date thereafter. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for 76 equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized in “Change in fair value of warrant liabilities” in the Consolidated Statements of Operations and Comprehensive Loss. Based on the availability of sufficient observable information, the Company determines the fair value of the liability classified private placement warrants by approximating the value with the price of the public warrants at the respective period end, which is inherently less subjective and judgmental given it is based on observable inputs. Other Comprehensive Loss The Company’s comprehensive loss includes net income (loss) as well as foreign currency translation adjustments, net of tax. Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future) are also recorded in accumulated other comprehensive loss in stockholders’ equity. Fair Value Measurements The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Variable Interest Entities and Investments In accordance with the guidance for the consolidation of a variable interest entity (“VIE”), the Company analyzes its variable interests, including loans, leases, guarantees, and equity investments, to determine if the entity in which it has a variable interest is a VIE. The Company’s analysis includes both quantitative and qualitative considerations. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and financial agreements. The Company also uses its quantitative and qualitative analyses to determine if it is the primary beneficiary of the VIE, and if such determination is made, it includes the accounts of the VIE in its consolidated financial statements. Recent Accounting Pronouncements Recent Accounting Standards Adopted by the Company In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires entities to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the CODM. The standard is effective for the Company beginning in fiscal year 2024 and interim periods within fiscal year 2025, with early adoption permitted. The Company adopted the standard retrospectively. Refer to Note 17— Operating Segments and Geographic Information for additional information on the Company’s reportable segments. Accounting Standards Recently Issued but Not Yet Adopted by the Company In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires entities to expand their existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard is effective for the Company beginning in fiscal year 2025, with early adoption permitted. The new standard is 77 expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures. In March 2024, the Securities and Exchange Commission (“SEC”) adopted final climate-related disclosure rules under SEC Release Nos. 33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors . The rules require disclosure of governance, risk management and strategy related to material climate-related risks as well as disclosure of material greenhouse gas emissions in registration statements and annual reports. In addition, the rules require presentation of certain material climate-related disclosures in the annual consolidated financial statements. On April 4, 2024, the SEC voluntarily stayed the effective date of the final rules pending completion of judicial review following legal challenges. The disclosure requirements will apply to the Company beginning with fiscal year 2025, pending resolution of the stay. The Company is currently evaluating the impact of the rules on the consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures. All other new accounting pronouncements issued, but not yet effective or adopted have been deemed to be not relevant to the Company and, accordingly, are not expected to have a material impact once adopted. 2. Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions Discontinued Operations The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the criteria prescribed by FASB ASC 205, Presentation of Financial Statements are met. While the 2023 Divestitures did not previously qualify for presentation as discontinued operations, the Company concluded that, in the aggregate, the sales of these businesses along with the 2024 Divestitures (collectively, the “discontinued operations” that are all part of the divestiture plan) met the criteria for discontinued operations presentation as their dispositions represent a strategic shift that has had a major effect on the Company's operations and financial results. As a result, each of these businesses has been reclassified to discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss, Consolidated Balance Sheets and Consolidated Statements of Cash Flows for all periods presented. As part of the agreements for certain divestitures, the Company has agreed to provide certain transitional services as detailed within respective transition services agreements for a period of time after sale. Income and expenses related to these transitional services are immaterial and are reported in “Net loss from continuing operations” on the Consolidated Statements of Operations and Comprehensive Loss. 78 The following table presents the summarized balance sheet of discontinued operations. As of December 31, 2024, all businesses that were previously classified as discontinued operations had been fully divested. (in thousands) December 31, 2023 Carrying amounts of major classes of assets Cash and cash equivalents $ 5,641 Accounts receivable, net of allowance for expected credit losses of $ 2,834 56,848 Prepaid and other current assets 6,839 Property and equipment, net 10,245 Goodwill 160,400 Other intangible assets, net 41,025 Investments in unconsolidated affiliates 564 Other assets 4,040 Total assets of discontinued operations (1) $ 285,602 Carrying amounts of major classes of liabilities Current portion of long-term debt $ 306 Accounts payable 9,737 Accrued compensation and benefits 5,729 Other accrued expenses 3,210 Deferred revenues 3,137 Long-term debt, net of current portion 4,666 Other liabilities 3,024 Total liabilities of discontinued operations (1) $ 29,809 Total net assets of the disposal group classified as discontinued operations $ 255,793 (1) Certain assets and liabilities from discontinued operations are classified as noncurrent at December 31, 2023 as they did not previously meet the held-for-sale criteria at that date. The following table presents the summarized statements of operations of discontinued operations. Year Ended December 31, (in thousands) 2024 2023 2022 Revenues $ 80,017 $ 324,720 $ 403,400 Cost of revenues (exclusive of depreciation and amortization shown separately below) 59,605 245,420 319,691 Selling, general, and administrative expenses 15,816 14,855 12,154 (Gain) loss on divestitures ( 95,099 ) 19,068 — Depreciation and amortization 4,695 15,841 17,029 Total operating expenses ( 14,983 ) 295,184 348,874 Operating income from discontinued operations 95,000 29,536 54,526 Other expenses: Interest expense 48 68 72 Total other expenses 48 68 72 Income before income taxes from discontinued operations 94,952 29,468 54,454 Provision for income taxes from discontinued operations 41,318 8,639 13,104 Net income from discontinued operations, net of tax 53,634 20,829 41,350 Less: net income (loss) from discontinued operations attributable to noncontrolling interest, net of tax 2,192 594 ( 546 ) Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 51,442 $ 20,235 $ 41,896 79 The following table provides a summary of the cash flows from discontinued operations: Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities from discontinued operations $ 6,437 $ 10,513 $ 16,553 Net cash used in investing activities from discontinued operations ( 7,304 ) ( 4,708 ) ( 7,440 ) Net cash used in financing activities from discontinued operations ( 4,362 ) ( 2,942 ) ( 10,263 ) Net effect of foreign currency changes on cash from discontinued operations ( 412 ) 76 ( 307 ) Net change in cash, cash equivalents and restricted cash from discontinued operations $ ( 5,641 ) $ 2,939 $ ( 1,457 ) 2024 Divestitures On January 31, 2024, the Company sold a collection of foodservice businesses, previously classified as held for sale (as current assets) as of December 31, 2023 (collectively with the other businesses disposed during the twelve months ended December 31, 2024, the “2024 Divestitures”). As part of the sale, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving approximately $ 91.0 million, subject to working capital adjustments and an ongoing 7.5 % interest in the combined business. The ongoing ownership interest represents a continuing involvement which the Company has determined represents an equity method investment. Upon the close of the transaction, the retained 7.5 % interest was recognized at fair value of $ 8.4 million, valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow. The investment is reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and an immaterial amount of equity income (loss) reported in “Income from equity method investments” on the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2024. Transactions between the Company and the combined foodservice entity are considered to be related-party transactions subsequent to the divesture. During the second quarter of 2024, the Company sold two agencies in the Branded Services segment, one agency in the Experiential Services segment and one agency in the Retailer Services segment. The Company received $ 65.2 million including estimated working capital adjustments. On July 31, 2024, the Company completed the sale of the Jun Group business in exchange for proceeds of approximately $ 185.0 million less any adjustments. The Company received approximately $ 130.0 million in cash upon completion of the sale. As part of the purchase agreement, the buyer has agreed to remit the remaining consideration of $ 27.5 million (less $ 5.0 million estimated adjustments) and $ 27.5 million, 12 and 18 months , respectively, after the completion of the sale. During the year ended December 31, 2024 , the Company recorded a gain from the 2024 Divestitures of $ 95.1 million as a component of “Net income from discontinued operations, net of tax” in the Consolidated Statements of Operations and Comprehensive Loss. Proceeds from the sales were classified as cash provided by investing activities from continuing operations in the Consolidated Statements of Cash Flows. 2023 Deconsolidation of ASL On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited (“ASL”), its European joint venture, from a majority interest to a minority interest of 49.6 %. The Company also removed certain participating rights with ASL related to capital allocation and certain of the Company’s decision making rights, resulting in a loss of control. Therefore, in accordance with ASC 810, ASL was deconsolidated from the Company’s consolidated financial statements. Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “ Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income (loss) reported in “Income from equity method investments” on the Consolidated Statements of Operations and Other Comprehensive Loss. Transactions between the Company and ASL are considered to be related-party transactions from the date of deconsolidation. The fair value of the Company's continuing investment in ASL of $ 91.9 million was determined at the date of deconsolidation, recorded within “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and is assessed for impairment at each reporting period. The estimated fair value of the underlying business was determined based on a combination of the income and market approaches. The income approach utilizes estimates of discounted cash flows for the underlying business, which requires assumptions for growth rates, EBITDA margins, terminal growth rate, discount rate, and incremental net working capital, all of which require significant management judgment. The market approach applies market multiples derived from historical earnings data of selected guideline publicly traded companies. The Company compared a weighted average of the output from the income and market approaches to compute the fair value of ASL. The assumptions in the income and market approach are based on significant inputs not 80 observable in the market and thus represent Level 3 measurements within the fair value hierarchy (described in Note 1—O rganization and Significant Accounting Policies ). The difference between the carrying value of the assets and liabilities of ASL that were deconsolidated and the fair value of the continuing investment, as determined at the date of deconsolidation, was $ 58.9 million, before tax, and this gain on deconsolidation is reflected within the Company’s Consolidated Statements of Operations and Other Comprehensive Loss for the year ended December 31, 2023. As a result of the ASL deconsolidation, the Company determined a triggering event occurred for the sales indefinite-lived trade name and an intangible asset impairment charge of $ 43.5 million was recorded. As part of the Company derecognizing ASL, the Company attributed $ 18.2 million of the former Sales reporting unit goodwill to that business, which was derecognized and reflected in the calculated gain on sale. The Company determined that the remaining former Sales reporting unit goodwill was not impaired. ASL is party to transactions with the Company and its consolidated subsidiaries entered into in the normal course of business and these transactions include corporate expenses for services benefiting ASL. Up to the date of the deconsolidation, these transactions were eliminated on consolidation and had no impact on the Company’s Consolidated Statements of Operations and Comprehensive Loss. After deconsolidating ASL, these transactions are treated as third-party transactions in the Company’s financial statements. The amount of these related-party transactions is included within Note 15— Related Parties . 2023 Divestitures During the year ended December 31, 2023, the Company recognized a loss on the sale of businesses of $ 19.1 million, as a component of “Net income from discontinued operations, net of tax” in the Consolidated Statements of Operations and Comprehensive Loss. The Company received $ 21.1 million of proceeds, net of transaction fees and holdbacks. 2022 Acquisitions The Company acquired four businesses during the year ended December 31, 2022. The acquisitions were accounted for under the acquisition method of accounting. As such, the purchase consideration for each acquired business was allocated to the acquired tangible and intangible assets and liabilities assumed based upon their respective fair values. Assets acquired and liabilities assumed in the business combinations were recorded on the Company’s financial statements as of the acquisition date based upon the estimated fair value at such date. The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The results of operations of each acquired business has been included in the Consolidated Statements of Operations and Comprehensive Loss since its respective date of acquisition. The aggregate purchase price for the acquisitions referenced above was $ 75.5 million, which includes $ 74.2 million paid in cash, $ 0.5 million recorded as contingent consideration liabilities, and $ 0.8 million recorded as holdback amounts. Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and are recorded at fair value. The maximum potential payment outcome related to the acquisitions was $ 1.6 million. The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise. Of the resulting goodwill relating to these acquisitions, $ 1.0 million is deductible for tax purposes. 81 The fair values of the identifiable assets and liabilities of the acquisitions less post-close adjustments related to working capital completed during the year ended December 31, 2022, as of the applicable acquisition dates, are as follows: (in thousands) Consideration: Cash $ 74,206 Holdback 810 Fair value of contingent consideration 510 Total consideration 75,526 Recognized amounts of identifiable assets acquired and liabilities assumed: Assets Accounts receivable $ 6,817 Other assets 3,446 Identifiable intangible assets 25,546 Total assets 35,809 Liabilities Accounts payable 7,363 Deferred tax liabilities and other 8,546 Total liabilities 15,909 Redeemable noncontrolling interest 1,987 Noncontrolling interest 974 Total identifiable net assets 16,939 Goodwill arising from acquisitions $ 58,587 The identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives. The fair value and estimated useful lives of the intangible assets acquired are as follows: (in thousands) Amount Weighted Average Useful Life Client relationships $ 24,413 6 years Trade names 1,133 5 years Total identifiable intangible assets 25,546 The operating results of the businesses acquired during the year ended December 31, 2022 contributed total revenues of $ 35.2 million during the year ended December 31, 2022. The Company has determined that the presentation of net income (loss) from the date of acquisition is impracticable due to the integration of the operations upon acquisition. During the year ended December 31, 2022, the Company incurred $ 0.8 million in transaction costs related to the acquisitions described above. These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. 82 3. Goodwill and Intangible Assets Changes in goodwill for the years ended December 31, 2024 and 2023, are as follows: (in thousands) Branded Services Experiential Services Retailer Services Total Gross carrying amount as of December 31, 2022 $ 990,115 $ 547,671 $ 1,206,559 $ 2,744,345 Accumulated impairment charge ( 722,675 ) ( 308,244 ) ( 988,604 ) ( 2,019,523 ) Balance at January 1, 2023 267,440 239,427 217,955 724,822 Measurement period adjustments 350 — — 350 Deconsolidation of subsidiaries ( 18,193 ) — — ( 18,193 ) Foreign exchange translation effects 3,212 — — 3,212 Balance at December 31, 2023 252,809 239,427 217,955 710,191 Impairment charge ( 233,170 ) — — ( 233,170 ) Balance at December 31, 2024 $ 19,639 $ 239,427 $ 217,955 $ 477,021 During the second quarter of fiscal year 2024, the Company determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill due to the pending sale of one of the businesses that comprised a substantial portion of the assets, liabilities and prospective cash flows of the Branded Agencies reporting unit. As a result of the impairment test performed, the Company recognized a goodwill impairment charge of $ 99.7 million related to the Company's Branded Agencies reporting unit goodwill during the year ended December 31, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss. As a result of this charge, an immaterial amount of goodwill remains in this reporting unit. During the fourth quarter of fiscal year 2024, the Company identified a triggering event that required an impairment assessment of goodwill for the Branded Services reporting unit. The triggering event was due to the loss of clients and a reduction in the scope of client services as the Company’s clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate. As a result of the goodwill impairment test, the Company recognized a goodwill impairment charge of $ 133.5 million related to the Branded Services reporting unit during the year ended December 31, 2024. This charge is reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss. As a result of this charge, the Branded Services segment had accumulated impairment losses to goodwill of $ 955.8 million as of December 31, 2024. During the fiscal year ended December 31, 2022, the Company recognized goodwill impairment charges of $ 1,367.5 million as a result of the Company’s annual evaluation of goodwill impairment test (as further described in Note 1 —O rganization and Significant Accounting Policies ). Accumulated impairment losses to goodwill were $ 2,252.7 million and $ 2,019.5 million as of December 31, 2024 and 2023, respectively. The following tables set forth information for intangible assets: December 31, 2024 (amounts in thousands) Weighted Average Useful Life Gross Carrying Value Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Finite-lived intangible assets: Client relationships 14 years $ 2,256,382 $ 1,559,551 $ — $ 696,831 Trade names 10 years 88,600 62,353 — 26,247 Total finite-lived intangible assets 2,344,982 1,621,904 — 723,078 Indefinite-lived intangible assets: Trade name 1,480,000 — 870,500 609,500 Total other intangible assets $ 3,824,982 $ 1,621,904 $ 870,500 $ 1,332,578 83 December 31, 2023 (amounts in thousands) Weighted Average Useful Life Gross Carrying Value Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Finite-lived intangible assets: Client relationships 14 years $ 2,282,792 $ 1,417,570 $ — $ 865,222 Trade names 10 years 88,600 53,494 — 35,106 Total finite-lived intangible assets 2,371,392 1,471,064 — 900,328 Indefinite-lived intangible assets: Trade name 1,480,000 — 828,500 651,500 Total other intangible assets $ 3,851,392 $ 1,471,064 $ 828,500 $ 1,551,828 Intangible assets, along with the related accumulated amortization, are removed from the table above at the end of the fiscal year they become fully amortized. As of December 31, 2024, estimated future amortization expenses of the Company’s finite-lived intangible assets are as follows: (in thousands) 2025 $ 171,619 2026 169,131 2027 167,500 2028 133,069 2029 76,636 Thereafter 5,123 Total amortization expense $ 723,078 The Company records all intangible assets at their respective fair values and assesses the estimated useful lives of the assets at the time of acquisition. Client relationships were valued using the multi-period excess earnings method under the income approach. The values of client relationships are generally regarded as the estimated economic benefit derived from the incremental revenues and related cash flows as a direct result of the client relationships in place versus having to replicate them. Further, the Company evaluated the legal, regulatory, contractual, competitive, economic or other factors in determining the useful life. Trade names were valued using the relief-from-royalty method under the income approach. This method relies on the premise that, in lieu of ownership, a company would be willing to pay a royalty to obtain access to the use and benefits of the trade names. The Company has considered its trade name related to the 2014 Topco Acquisition to be indefinite, as there is no foreseeable limit on the period of time over which such trade names are expected to contribute to the cash flows of the reporting entity. Amortization expenses included in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 , 2023 and 2022 were $ 177.3 million, $ 186.8 million, and $ 189.1 million, respectively. During the fourth quarter of December 31, 2024, the Company recognized an intangible asset impairment charge of $ 42.0 million as a result of the triggering event for the Branded Services reporting unit. During the year ended December 31, 2023, the Company recognized an intangible asset impairment charge of $ 43.5 million related to the Company's indefinite-lived trade name, in connection with the Company’s deconsolidation of its European joint venture and planned disposition of its foodservice businesses (as further described in Note 1 —O rganization and Significant Accounting Policies and Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions ). During the year ended December 31, 2022, the Company recognized intangible asset impairment charges of $ 205.0 million related to the Company's indefinite-lived trade name in connection with the Company’s annual intangible asset impairment test on October 1, 2022 (as further described in Note 1 —O rganization and Significant Accounting Policies ). During fiscal year 2022, the Company concluded the impact of challenges in the labor market and continued inflationary pressures was an indicator that impairment may exist related to its client relationship intangible assets and as a result, the Company performed a recoverability test and determined that there was no impairment. 84 4. Prepaid Expenses and Other Assets Prepaid expenses and other current assets consist of the following: December 31, (in thousands) 2024 2023 Inventory and supplies $ 8,061 $ 29,731 Prepaid expenses 39,473 44,949 Interest rate collars and caps — 26,279 Prepaid income taxes 2,120 2,889 Other receivables 11,626 8,187 Consideration receivable from divestitures 22,530 — Other current assets 3,108 3,886 Total prepaid expenses and other current assets $ 86,918 $ 115,921 Inventory is stated at the lower of cost and net realizable value. Costs are determined on the first-in, first-out basis. The Company records write-downs of inventories which are obsolete or in excess of anticipated demand or net realizable value based on a consideration of marketability, historical sales and demand forecasts which consider assumptions about future demand and market conditions. Other assets consist of the following: December 31, (in thousands) 2024 2023 Operating lease right-of-use assets $ 25,932 $ 33,841 Deposits 3,394 3,201 Workers' compensation receivable 3,605 3,941 Consideration receivable from divestitures 25,166 — Other long-term assets 3,810 2,560 Total other assets $ 61,907 $ 43,543 5. Property and Equipment Property and equipment consist of the following: December 31, (in thousands) 2024 2023 Software $ 140,680 $ 103,260 Computer hardware 51,367 58,528 Leasehold improvements 16,342 18,668 Furniture, fixtures, and other 4,553 4,368 Total property and equipment 212,942 184,824 Less: accumulated depreciation ( 115,179 ) ( 120,116 ) Total property and equipment, net $ 97,763 $ 64,708 Depreciation expense was $ 27.3 million, $ 22.0 million, and $ 27.0 million related to property and equipment for the years ended December 31, 2024 , 2023, and 2022, respectively. 85 6. Other Liabilities Other accrued expenses consist of the following: Year Ended December 31, (in thousands) 2024 2023 Accrued interest payable $ 30,987 $ 35,637 Contingent consideration — 18,355 Operating lease liabilities 13,323 14,573 Accrued income taxes 6,238 3,864 General liability insurance reserve 16,054 12,926 Client deposits 12,906 15,544 Rebates due to retailers 9,752 6,348 Liabilities related to the Take 5 Matter 9,416 9,416 Employee medical self-insurance reserves 10,250 8,695 Accrued restructuring and reorganization 15,598 6,402 Other accrued expenses 10,153 12,655 Total other accrued expenses $ 134,677 $ 144,415 Other long-term liabilities consist of the following: December 31, (in thousands) 2024 2023 Operating lease liabilities $ 24,648 $ 33,967 Workers' compensation 33,722 35,025 Other long-term liabilities 5,771 5,563 Total other long-term liabilities $ 64,141 $ 74,555 Under the workers’ compensation programs, the estimated liability for claims incurred but unpaid at December 31, 2024 and 2023 were $ 59.4 million and $ 63.0 million, respectively. These amounts include reported claims as well as claims incurred but not reported. As of December 31, 2024 , $ 25.7 million and $ 33.7 million of this liability was included in the “Accrued compensation and benefits” and “Other long-term liabilities” in the Consolidated Balance Sheets, respectively. As of December 31, 2023 , $ 28.0 million and $ 35.0 million of this liability was included in the “Accrued compensation and benefits” and “Other long-term liabilities” in the Consolidated Balance Sheets, respectively. In connection with its deductible limits, the Company has standby letters-of-credit in the amount of $ 44.1 million as of December 31, 2024 and 2023, respectively, and $ 15.0 million and $ 16.0 million surety bond as of such years supporting the estimated unpaid claim liabilities. Contingent Consideration Liabilities Each reporting period, the Company measures the fair value of its contingent liabilities by evaluating the significant unobservable inputs and probability weightings using Monte Carlo simulations. Any resulting decreases or increases in the fair value result in a corresponding gain or loss reported in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. The Company has reassessed the fair value of contingent consideration based on the achievement of performance targets as defined in the respective purchase agreements and it resulted in fair value adjustments of $ 1.7 million and $ 11.2 million losses that are included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss during the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 , there were no contingent consideration liabilities outstanding. The following table summarizes the changes in the carrying value of the contingent consideration liabilities: December 31, (in thousands) 2024 2023 Beginning of the period $ 18,355 $ 14,626 Changes in fair value 1,678 11,152 Payments ( 20,033 ) ( 7,423 ) End of the period $ — $ 18,355 86 7. Restructuring During fiscal year 2024, the Company implemented restructuring plans as a result of the overall reorganization. Voluntary Early Retirement Program (“VERP”) During fiscal year 2024, the Company offered a VERP to certain eligible U.S.-based employees. During the year ended December 31, 2024, the Company recorded $ 20.1 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. 2024 Restructuring Program (“2024 RIF”) In September 2024, the Company announced a cost savings program to improve operational performance and align cost structures consistent with revenue levels associated with business changes, which includes termination benefits associated with a reduction-in-force substantially completed in fiscal year 2024. During the year ended December 31, 2024, the Company recorded $ 9.9 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2024, $ 14.1 million of the Company’s restructuring charges were included in “Other accrued expenses” in the Consolidated Balance Sheets. The following table summarizes the Company’s restructuring activity: (in thousands) 2024 RIF 2024 VERP Total Balance at January 1, 2024 $ — $ — $ — Charges 9,931 20,120 30,051 Cash payments ( 7,644 ) ( 8,339 ) ( 15,983 ) Balance at December 31, 2024 $ 2,287 $ 11,781 $ 14,068 The following table summarizes the Company’s restructuring expense by segment: (in thousands) Year Ended December 31, 2024 Branded Services $ 19,343 Experiential Services 4,368 Retailer Services 6,340 Total restructuring expenses $ 30,051 8. Debt December 31, (in thousands) 2024 2023 Term Loan Facility $ 1,105,995 $ 1,149,057 Senior Secured Notes 615,087 743,000 Other notes — 426 Total long-term debt 1,721,082 1,892,483 Less: current portion 13,250 13,274 Less: debt issuance costs 21,142 31,091 Long-term debt, net of current portion $ 1,686,690 $ 1,848,118 Senior Secured Credit Facilities Effective October 28, 2020, Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company (the “Borrower”), entered into (i) a senior secured asset-based revolving credit facility (“ABL Revolving Credit Agreement”) in an aggregate principal amount of up to $ 400.0 million, subject to borrowing base capacity (as amended and/or restated from time to time, the “Revolving Credit Facility”) and (ii) a secured first lien term loan credit facility (“First Lien Credit Agreement”) in an aggregate 87 principal amount of $ 1.325 billion (as amended and/or/restated from time to time, the “Term Loan Facility” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”). Revolving Credit Facility The Revolving Credit Facility provides for revolving loans and letters of credit in an aggregate amount of up to $ 500.0 million, subject to borrowing base capacity. Letters of credit are limited to the lesser of (a) $ 150.0 million and (b) the aggregate unused amount of commitments under the Revolving Credit Facility then in effect. Loans under the Revolving Credit Facility may be denominated in either U.S. dollars or Canadian dollars. Bank of America, N.A. ( “Bank of America”) , will act as administrative agent and collateral agent. The Revolving Credit Facility matures five years after the date the Company enters into the Company's Revolving Credit Facility. The Borrower may use borrowings under the Revolving Credit Facility to fund working capital and for other general corporate purposes, including permitted acquisitions and other investments. Borrowings under the Revolving Credit Facility are limited by borrowing base calculations based on the sum of specified percentages of eligible accounts receivable plus specified percentages of qualified cash, minus the amount of any applicable reserves. Borrowings will bear interest at a floating rate, which can be either an adjusted Term SOFR or Alternative Currency Spread rate plus an applicable margin or, at the Borrower’s option, a base rate or Canadian Prime Rate plus an applicable margin. The applicable margins for the Revolving Credit Facility are 1.75 %, 2.00 % or 2.25 %, with respect to Term SOFR or Alternative Currency Spread rate borrowings and 0.75 %, 1.00 %, or 1.25 %, with respect to base rate or Canadian Prime Rate borrowings, in each case depending on average excess availability under the Revolving Credit Facility. The Borrower’s ability to draw under the Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, the Borrower’s delivery of prior written notice of a borrowing or issuance, as applicable, the Borrower’s ability to reaffirm the representations and warranties contained in the credit agreement governing the Revolving Credit Facility and the absence of any default or event of default thereunder. The Borrower’s obligations under the Revolving Credit Facility are guaranteed by Karman Intermediate Corp. (“Holdings”) and all of the Borrower’s direct and indirect wholly owned material U.S. subsidiaries (subject to certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality thresholds of aggregate assets and revenues of Canadian subsidiaries) (the “Guarantors”). The Revolving Credit Facility is secured by a lien on substantially all of Holdings’, the Borrower’s and the Guarantors’ assets (subject to certain permitted exceptions). The Revolving Credit Facility has a first-priority lien on the current asset collateral and a second-priority lien on security interests in the fixed asset collateral (second in priority to the liens securing the Notes and the Term Loan Facility discussed below), in each case, subject to other permitted liens. The Revolving Credit Facility has the following fees: (i) an unused line fee of 0.375 % or 0.250 % per annum of the unused portion of the Revolving Credit Facility, depending on average excess availability under the Revolving Credit Facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit equal to the applicable margin for adjusted Eurodollar rate loans, as applicable; and (iii) certain other customary fees and expenses of the lenders and agents thereunder. The Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on the Borrower’s ability and that of its subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness, enter into transactions with affiliates or change its line of business. The Revolving Credit Facility will require the maintenance of a fixed charge coverage ratio (as set forth in the credit agreement governing the Revolving Credit Facility) of 1.00 to 1.00 at the end of each fiscal quarter when excess availability is less than the greater of $ 25.0 million and 10 % of the lesser of the borrowing base and maximum borrowing capacity. Such fixed charge coverage ratio will be tested at the end of each quarter until such time as excess availability exceeds the level set forth above. The Revolving Credit Facility provides that, upon the occurrence of certain events of default, the Borrower’s obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, material pension-plan events, certain change of control events and other customary events of default. On October 28, 2021, the Borrower and Holdings also entered into the First Amendment to the ABL Revolving Credit Agreement (the “ABL Amendment”), which amended the ABL Revolving Credit Agreement, dated October 28, 2020, by and among the Borrower, Holdings, the lenders from time-to-time party thereto and Bank of America, as administrative agent. The ABL Amendment was entered into by the Borrower to amend certain terms and provisions, including (i) reducing the interest rate floor for Eurocurrency rate loans from 0.50 % to 0.00 % and base rate loans from 1.50 % to 1.00 %, and (ii) updating the provisions by which 88 U.S. Dollar LIBOR will eventually be replaced with SOFR or another interest rate benchmark to reflect the most recent standards and practices used in the industry. The ABL Amendment was deemed to be a modification of the Revolving Credit Facility for accounting purposes. On December 2, 2022, the Borrower, Holdings and certain of the Borrower’s subsidiaries, entered into the Second Amendment to ABL Revolving Credit Agreement (the “Second Amendment”), which amends the ABL Revolving Credit Agreement, by and among the Borrower, Holdings, the lenders from time to time party thereto and Bank of America, as administrative agent, and the other parties thereto. The Second Amendment was entered into by the Borrower to amend certain terms and provisions of the Revolving Credit Facility, including, among other things: (i) increasing the aggregate amount of maximum revolving commitments available from $ 400.0 million to $ 500.0 million; (ii) replacing the Eurocurrency Rate interest rate metric with a metric based on Term SOFR (as defined in the Second Amendment), whereby applicable borrowings in United States dollars will bear interest at a floating rate based on Term SOFR plus an applicable margin; (iii) reducing each applicable interest rate pricing tier based on the Average Historical Excess Availability (as defined therein) with respect to Term SOFR borrowings, Alternative Currency borrowings, base rate borrowings and Canadian Prime Rate borrowings, in each case for each pricing tier by 0.25 % per annum; and (iv) extending the scheduled maturity date of the borrowings to December 2, 2027. As of December 31, 2024 and 2023, there were no amounts due under the Revolving Credit Facility. During the fiscal year ended December 31, 2024, the Company had no borrowings or repayments under the Revolving Credit Facility. During the fiscal year ended December 31, 2023, the Company had borrowings and repayments under the Revolving Credit Facility of $ 40.0 million each. During the fiscal year ended December 31, 2022, the Company had borrowings and repayments under the Revolving Credit Facility of $ 280.0 million each. Term Loan Facility The Term Loan Facility consists of a term loan credit facility denominated in U.S. dollars in an aggregate outstanding principal amount of $ 1.106 billion. Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00 % per annum of the principal amount. Borrowings will bear interest at a floating rate of Term SOFR plus an applicable margin of 4.25 % per annum, subject to additional spread adjustment on SOFR ranging from 0.11 % to 0.26 %. The Term Loan Facility matures on October 28, 2027 . The Borrower may voluntarily prepay loans or reduce commitments under the Term Loan Facility, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty. The Company voluntarily repurchased an aggregate of $ 29.8 million principal amount of its Term Loan Facility during the year ended December 31, 2024 . The Company recognized a gain on the repurchase of $ 0.9 million for the year ended December 31, 2024, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. The Borrower will be required to prepay the Term Loan Facility with 100 % of the net cash proceeds of certain asset sales (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios) and subject to certain reinvestment rights, 100 % of the net cash proceeds of certain debt issuances and 50 % of excess cash flow (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios). The Borrower was not required to make any excess cash flow payments for the years ended December 31, 2024 and 2023, and the Borrower did not make any other mandatory or voluntary prepayments of the Term Loan Facility for the years ended December 31, 2024 and 2023. The Borrower’s obligations under the Term Loan Facility are guaranteed by Holdings and the Guarantors. The Term Loan Facility is secured by a lien on substantially all of Holdings’, the Borrower’s and the Guarantors’ assets (subject to certain permitted exceptions). The Term Loan Facility has a first-priority lien on the fixed asset collateral (equal in priority with the liens securing the Notes) and a second-priority lien on the current asset collateral (second in priority to the liens securing the Revolving Credit Facility), in each case, subject to other permitted liens. The Term Loan Facility contains certain customary negative covenants, including, but not limited to, restrictions on the Borrower’s ability and that of its restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates. The Term Loan Facility provides that, upon the occurrence of certain events of default, the Company’s obligations thereunder may be accelerated. Such events of default will include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, change of control and other customary events of default. 89 On October 28, 2021, the Borrower, together Holdings and certain of the Borrower’s subsidiaries, entered into Amendment No. 1 to the First Lien Credit Agreement (the “First Lien Amendment”), which amended the Term Loan Facility, dated October 28, 2020, by and among the Borrower, Holdings, Bank of America, as administrative agent and collateral agent, each lender party from time to time thereto, and the other parties thereto. The First Lien Amendment was entered into by the Borrower to reduce the applicable interest rate on the term loan from 5.25 % to 4.50 % per annum. Additional terms and provisions amended include (i) resetting the period for six months following October 28, 2021 in which a 1.00 % prepayment premium shall apply to any prepayment of the term loan in connection with certain repricing events, and (ii) updating the provisions by which U.S. Dollar LIBOR will eventually be replaced with SOFR or another interest rate benchmark to reflect the most recent standards and practices used in the industry. Th e First Lien Amendment was deemed to be a modification of the Term Loan Facility for accounting purposes. In May 2023, the Company amended the Term Loan Facility to replace the U.S. Dollar LIBOR provisions with SOFR, effective June 30, 2023. In April 2024 (the “Third Lien Amendment Effective Date”), the Company amended the Term Loan Facility (the “Third Lien Amendment”) to (i) reduce the applicable interest rate margin (a) from 4.50 % to 4.25 % for SOFR loans or (b) from 3.50 % to 3.25 % for base rate loans; and (ii) reset the period for six months following the Third Lien Amendment Effective Date in which a 1.00 % prepayment premium shall apply to any prepayment of the term loans in connection with a Repricing Event (as defined in the amended First Lien Credit Agreement). The First Lien Amendment and Third Lien Amendment were deemed to be modifications of the Term Loan Facility for accounting purposes. Senior Secured Notes Effective as of October 28, 2020, Advantage Solutions FinCo LLC (“Finco”) issued $ 775.0 million aggregate principal amount of 6.50 % Senior Secured Notes due 2028 (the “Notes”). Substantially concurrently with the issuance of the Notes, Finco merged with and into Advantage Sales & Marketing Inc. (the “Issuer”), with the Issuer continuing as the surviving entity and assuming the obligations of Finco. The Notes were sold to certain financial institutions and the Notes were then resold to certain non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 100 % of their principal amount. The terms of the Notes are governed by an Indenture, dated as of October 28, 2020 (the “Indenture”), among Finco, the Issuer, the guarantors named therein (the “Notes Guarantors”) and Wilmington Trust, National Association, as trustee and collateral agent. Interest and maturity Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 at a rate of 6.50% per annum, commencing on May 15, 2021 . The Notes will mature on November 15, 2028 . Guarantees The Notes are guaranteed by Holdings and each of the Issuer’s direct and indirect wholly owned material U.S. subsidiaries (subject to certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality thresholds of aggregate assets and revenues of Canadian subsidiaries) that is a borrower or guarantor under the Term Loan Facility. Security and ranking The Notes and the related guarantees are the general, senior secured obligations of the Issuer and the Notes Guarantors, are secured on a first-priority pari passu basis by security interests on the fixed asset collateral (equal in priority with liens securing the Term Loan Facility), and are secured on a second-priority basis by security interests on the current asset collateral (second in priority to the liens securing the Revolving Credit Facility and equal in priority with liens securing the Term Loan Facility), in each case, subject to certain limitations and exceptions and permitted liens. The Notes and related guarantees rank (i) equally in right of payment with all of the Issuer’s and the Guarantors’ senior indebtedness, without giving effect to collateral arrangements (including the Senior Secured Credit Facilities) and effectively equal to all of the Issuer’s and the Guarantors’ senior indebtedness secured on the same priority basis as the Notes, including the Term Loan Facility, (ii) effectively subordinated to any of the Issuer’s and the Guarantors’ indebtedness that is secured by assets that do not constitute collateral for the Notes to the extent of the value of the assets securing such indebtedness and to indebtedness that is secured by a senior-priority lien, including the Revolving Credit Facility to the extent of the value of the current asset collateral and (iii) structurally subordinated to the liabilities of the Issuer’s non-Guarantor subsidiaries. 90 Optional redemption for the Notes The Notes are redeemable on or after November 15, 2023 at the applicable redemption prices specified in the Indenture plus accrued and unpaid interest. If the Issuer or its restricted subsidiaries sell certain of their respective assets or experience specific kinds of changes of control, subject to certain exceptions, the Issuer must offer to purchase the Notes at par. In connection with any offer to purchase all Notes, if holders of no less than 90 % of the aggregate principal amount of Notes validly tender their Notes, the Issuer is entitled to redeem any remaining Notes at the price offered to each holder. The Borrower may voluntarily prepay loans or reduce commitments under the Notes, in whole or in part without premium or penalty at a mutually agreeable rate between the buyer and the seller. During the year ended December 31, 2024 , the Borrower repurchased Notes with a par value of $ 127.9 million for $ 118.3 million. The Company recognized a gain on the repurchase of the Notes of $ 9.6 million for the year ended December 31, 2024, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. The Company recognized a gain on the repurchase of the Notes of $ 4.0 million for the year ended December 31, 2023, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. Restrictive covenants The Notes are subject to covenants that, among other things limit the Issuer’s ability and its restricted subsidiaries’ ability to: incur additional indebtedness or guarantee indebtedness; pay dividends or make other distributions in respect of, or repurchase or redeem, the Issuer’s or a parent entity’s capital stock; prepay, redeem or repurchase certain indebtedness; issue certain preferred stock or similar equity securities; make loans and investments; sell or otherwise dispose of assets; incur liens; enter into transactions with affiliates; enter into agreements restricting the Issuer’s subsidiaries’ ability to pay dividends; and consolidate, merge or sell all or substantially all of the Issuer’s assets, except as permitted under the terms of the Notes. Most of these covenants will be suspended on the Notes when they have investment grade ratings from both Moody’s Investors Service, Inc. and S&P Global Ratings and so long as no default or event of default under the Indenture has occurred and is continuing. Events of default The following constitute events of default under the Notes, among others: default in the payment of interest; default in the payment of principal; failure to comply with covenants; failure to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount; certain events of bankruptcy; failure to pay a judgment for payment of money exceeding a specified aggregate amount; voidance of subsidiary guarantees; failure of any material provision of any security document or intercreditor agreement to be in full force and effect; and lack of perfection of liens on a material portion of the collateral, in each case subject to applicable grace periods. Debt Maturities Future minimum principal payments on long-term debt are as follows: (in thousands) 2025 $ 13,250 2026 13,250 2027 1,079,495 2028 615,087 2029 — Total future minimum principal payments $ 1,721,082 9. Leases The Company leases facilities, and equipment under noncancelable leases that have been classified as operating leases for financial reporting purposes. These leases often include one or more options to renew and the lease term includes the renewal terms when it is reasonably certain that the Company will exercise the option. In general, for the Company’s material leases, the renewal options are not included in the calculation of its right-of-use assets and lease liabilities, as the Company does not believe that it is reasonably certain that these renewal options will be exercised. The Company’s lease agreements do not contain any material residual guarantees or material restrictive covenants. All operating lease expenses are recognized on a straight-line basis over the lease term as a component of “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. Payments under the Company’s lease arrangements are primarily fixed. However, certain lease agreements contain variable costs, which are expensed as incurred and 91 not included in the calculation of the Company’s right-of-use assets and related liabilities for those leases. These costs typically include real estate taxes, common area maintenance and utilities for which the Company is obligated to pay under the terms of those leases. During the years ended December 31, 2024 , 2023, and 2022, the Company expensed approximately $ 18.0 million, $ 26.5 million and $ 29.7 million, respectively, of total operating lease costs, which includes $ 2.0 million, $ 4.8 million and $ 4.4 million of variable lease costs, respectively. Based on the present value of the lease payments for the remaining lease term of the Company’s existing leases, the Company’s right-of-use assets and lease liabilities for operating leases as of December 31, 2024 and 2023 were as follows: Classification December 31, (in thousands) 2024 2023 Assets Operating lease right-of-use assets Other assets $ 25,932 $ 33,841 Liabilities Current operating lease liabilities Other accrued expenses 13,323 14,573 Noncurrent operating lease liabilities Other long-term liabilities 24,648 33,967 Total lease liabilities $ 37,971 $ 48,540 Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. In determining its incremental borrowing rate, the Company reviewed the terms of its leases, its credit facilities, and other factors. Information related to the Company’s right-of-use assets and related lease liabilities were as follows: Year Ended December 31, (amounts in thousands) 2024 2023 2022 Cash paid for operating lease liabilities $ 18,518 $ 25,527 $ 22,561 Right-of-use assets obtained in exchange for new operating lease obligations 855 18,187 29,937 Weighted-average remaining lease term 3.5 years 3.8 years 4.3 years Weighted-average discount rate 9.9 % 9.8 % 8.6 % Maturities of lea se liabilities as of December 31, 2024 were as follows: (in thousands) 2025 $ 16,328 2026 12,735 2027 6,914 2028 4,072 2029 3,351 Thereafter 1,883 Total lease payments 45,283 Less: imputed interest ( 7,312 ) Present value of lease liabilities $ 37,971 10 . Fair Value of Financial Instruments The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. As of December 31, 2024, and 2023, the Company’s interest rate derivatives and forward contracts are Level 2 assets and liabilities with the related fair values based on third-party pricing service models. These models use discounted cash flows that utilize market-based forward swap curves commensurate with the terms of the underlying instruments. 92 As of December 31, 2023, the contingent consideration liabilities are Level 3 liabilities with the related fair values based on significant unobservable inputs and probability weightings in using the income approach. The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy. The carrying amounts of “Cash and cash equivalents”, “Accounts receivable”, and “Accounts payable” approximate fair value due to the short-term maturities of these financial instruments in the Consolidated Balance Sheets. December 31, 2024 (in thousands) Fair Value Level 1 Level 2 Level 3 Assets measured at fair value Derivative financial instruments $ 796 $ — $ 796 $ — Total assets measured at fair value $ 796 $ — $ 796 $ — Liabilities measured at fair value Warrant liability $ 82 $ — $ 82 $ — Total liabilities measured at fair value $ 82 $ — $ 82 $ — December 31, 2023 (in thousands) Fair Value Level 1 Level 2 Level 3 Assets measured at fair value Derivative financial instruments $ 26,344 $ — $ 26,344 $ — Total assets measured at fair value $ 26,344 $ — $ 26,344 $ — Liabilities measured at fair value Warrant liability $ 667 $ — $ 667 $ — Contingent consideration liabilities 18,355 — — 18,355 Total liabilities measured at fair value $ 19,022 $ — $ 667 $ 18,355 Interest Rate Collar and Agreements The Company had interest rate collar and cap contracts with an aggregate notional value of principals of $ 850.0 million and $ 950.0 million as of December 31, 2024 and 2023 , respectively, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities. In July 2024, the Company entered into two interest rate collar contracts with a notional value of principal of $ 200.0 million each to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR. The interest rate collar contracts were effective December 16, 2024 and will mature on April 5, 2027 and 2028. In April 2023, the Company entered into two interest rate collar contracts in an aggregate notional amount of $300.0 million with a maturity date of April 5, 2026 to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR. The fair value of the Company's outstanding interest rate collars and caps of $ 0.8 million and $ 26.3 million were included in “Prepaid expenses and other current assets” and “Other assets” in the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. During the years ended December 31, 2024 , 2023, and 2022, the Company recognized interest income of $ 5.3 million, $ 7.7 million and $ 43.8 million, respectively, related to changes in the fair value of its derivative instruments. Warrant Liability The warrant liability is stated at fair value at each reporting period with the change in fair value recorded on the Consolidated Statement of Operations and Comprehensive Loss until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The private placement warrants are classified as Level 2 based on the availability of sufficient observable information using the price of the public warrants as an indirectly observable quoted price in active markets to measure the fair value of the private placement warrants, which is inherently less subjective and judgmental given it is based on observable inputs. On October 28, 2020, the Company recorded the initial warrant liability of the private placement warrants of $ 7.9 million. Subsequently, the warrant liability was remeasured to fair value resulting in gains of $ 0.6 million, $ 0.3 million and $ 21.2 million 93 reflected in “Change in fair value of warrant liabilities” in the Consolidated Statements of Operations and Comprehensive Loss during the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 , and 2023, 7,333,333 private placement warrants remained outstanding at a fair value of $ 0.1 million and $ 0.7 million, respectively. Long-term Debt The following table sets forth the carrying values and fair values of the Company’s financial liabilities measured on a non-recurring basis, categorized by input level within the fair value hierarchy: (in thousands) Carrying Value Fair Value (Level 2) Balance at December 31, 2024 Term Loan Facility $ 1,105,995 $ 1,153,346 Senior Secured Notes 615,087 612,533 Total long-term debt $ 1,721,082 $ 1,765,879 (in thousands) Carrying Value Fair Value (Level 2) Balance at December 31, 2023 Term Loan Facility $ 1,149,057 $ 1,221,012 Senior Secured Notes 743,000 745,223 Other notes 426 100 Total long-term debt $ 1,892,483 $ 1,966,335 The fair value of debt reported in the table above is based on adjusted price quotations on the debt instruments in an active market. The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the Revolving Credit Facility, approximate fair market value based on maturities for debt of similar terms. 11. Investments in Unconsolidated Affiliates The carrying value of the Company’s investments in unconsolidated affiliates accounted for under the equity method was $ 226.5 million and $ 210.8 million as of December 31, 2024 and 2023, respectively. The investments as of December 31, 2024 and 2023 included the Company’s investment in ASL and Global Smollan Holdings (“GSH”). The Company’s proportionate share in their net assets at December 31, 2024, and 2023 were $ 212.6 million and $ 205.0 million, respectively. The Company’s equity method investments are not considered significant based on Regulation S-X Rule 4-08(g); therefore, no summarized financial information for the Company’s unconsolidated subsidiaries have been presented. European Joint Venture and Smollan Holdings (“SH”) On November 30, 2023, the Company reduced its equity interest in ASL, its European joint venture, from a majority interest to a minority interest of 49.6% (“ASL Transaction”). As part of the ASL Transaction, the Company ceased to have a controlling financial interest in ASL. The Company reassessed the VIE and voting interest models and concluded the Company no longer has control. Therefore, in accordance with ASC 810, ASL was deconsolidated and the Company recorded a gain on deconsolidation of $58.9 million that has been included in the Consolidated Statements of Operations and Comprehensive Loss. Subsequent to the ASL Transaction, the Company retained significant influence over ASL, and the investment in ASL is accounted for under the equity method of accounting. The Company’s equity method investment in ASL was recognized at its fair value totaling $91.9 million on November 30, 2023. In conjunction with the ASL Transaction, the Company sold its 12.5% interest in Partnership SPV 1 Limited in exchange for a non-voting interest in GSH, resulting in an insignificant impact on the consolidated financial statements as a result of this transaction. In May 2023, the Company entered into a transaction in which it contributed its 25 % ownership in the common stock of SH to GSH. Subsequent to this contribution, the Company holds a 25 % non-voting equity investment in SH that provides the Company with preferred rights to non-cumulative dividends declared by SH with specified annual maximum dividends (“SH Dividend Shares”). The carrying value of the investment was not material as of December 31, 2024 and 2023. 94 ATV Investment The Company also holds 9.9 % of the outstanding common shares of a subsidiary of a Japanese supermarket chain (“ATV”). The Company does not have significant influence over ATV and, as a result, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The carrying value of the investment was $ 5.2 million and $ 5.8 million as of December 31, 2024 and 2023, respectively. Ceuta Holdings Limited In November 2023, the Company entered into an agreement and sold all of its 8.8% investment in Ceuta Holdings Limited. The Company recognized a loss on sale of investment of $4.2 million, as a component of “Income from equity method investments” in the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2023. The Company received $4.3 million of its common stock in exchange for its investment. Other Investments As part of the sale of the foodservice businesses during the year ended December 31, 2024, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving an ongoing 7.5% interest in the combined business. The ongoing ownership interest represents a continuing involvement which the Company has determined represents an equity method investment. Upon the close of the transaction, the retained 7.5% interest was recognized at fair value of $8.4 million. The carrying value of the investment was $9.0 million as of December 31, 2024 . 95 12. Stock-Based Compensation and Other Benefit Plans The Company has nonqualified stock options, restricted stock units (“RSUs”), and performance restricted stock units (“PSUs”) under the Advantage Solutions Inc. 2020 Incentive Award Plan (the “Plan”). The Company’s RSUs and PSUs are expensed based on the fair value at the grant date . The Company recognized stock-based compensation expense and equity-based compensation expense as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Restricted stock-based unit awards $ 17,731 $ 22,177 $ 21,215 Other share-based awards 13,288 13,090 10,993 Total stock-based compensation before tax 31,019 35,267 32,208 Tax benefit ( 5,050 ) ( 8,005 ) ( 6,695 ) Total stock-based compensation expense included in net loss $ 25,969 $ 27,262 $ 25,513 Performance Restricted Stock Units PSUs granted in fiscal year 2024 are subject to achievement of certain performance conditions based on measurements of the Company’s Adjusted EBITDA margin and cash earnings. The Company’s Adjusted EBITDA margin and cash earnings relative to specified targets will be measured each year over the three-year period of fiscal years 2024, 2025 and 2026, and an annual achievement percentage will be determined. The annual achievement percentages for each of fiscal years 2024, 2025 and 2026 will be averaged following the completion of the three-year performance period to determine the final achievement percentage. In addition, the earned PSUs are subject to further adjustment depending on the Company’s performance against a specified peer group for total stockholder return during the three-year performance period. This adjustment can either put a floor or a cap on the calculation of the final PSUs value. Subject to certain termination events, these PSUs are scheduled to cliff-vest on the third-year anniversary of the date of grant and may vest from 0 % to 200 % of the “target” number of PSUs specified in the table below. PSUs are subject to the recipient's continued service to the Company. PSUs granted in fiscal years 2023, 2022 and 2021 are subject to achievement of certain performance conditions based on the Company’s revenues (“PSU Revenues”) and Adjusted EBITDA (“PSU EBITDA”) targets in the respective measurement period and the recipient’s continued service to the Company. The measurement period is based on the twelve months of the respective fiscal year. The PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0 % to 150 % of the number of shares set forth in the table below. The number of PSUs earned shall be adjusted to be proportional to the partial performance between the Threshold Goals, Target Goals and Maximum Goals as defined in the award agreements. Details for each aforementioned defined term for each grant have been provided in the table below. The fair value of PSU grants was equal to the closing price of the Company's stock on the date of the applicable grant. The maximum potential expense if the Maximum Goals were met for these awards has been provided in the table below. Recognition of expense associated with performance-based stock is not permitted until achievement of the performance targets are probable of occurring. Measurement Period Number of Shares Threshold Number of Shares Target Number of Shares Maximum Weighted Average Grant Date Fair Value Per Share Maximum Remaining Unrecognized Compensation Expense Weighted-average remaining requisite service periods 2024 130,097 1,040,775 2,081,550 $ 4.33 $ 8,864,917 2.3 years 2023 5,592,945 5,592,945 8,389,418 $ 2.09 $ 6,389,726 1.4 years 2022 137,120 137,120 137,120 $ 5.51 $ 65,102 0.4 years 96 The following table summarizes the PSU activity for the year ended December 31, 2024: Performance Share Units Weighted Average Grant Date Fair Value Outstanding at January 1, 2024 7,339,129 $ 2.60 Granted 1,064,885 $ 4.33 Distributed ( 2,499,489 ) $ 3.33 Forfeited ( 1,459,997 ) $ 2.13 PSU performance adjustment 2,326,312 $ 2.08 Outstanding at December 31, 2024 (1) 6,770,840 $ 2.56 (1) PSU award activity is presented at Target until the period in which the Human Capital Committee approves the achievement percentages, at which point the awards are adjusted accordingly, subject to additional performance requirements and service-based vesting conditions. During the first quarter of fiscal year 2025, the Human Capital Committee determined the annual achievement percentage for PSUs granted in fiscal year 2024 to be 128.3 % . The value of these PSU awards remain subject to additional performance requirements (i.e. the annual achievement percentages for fiscal years 2025 and 2026 and the Company’s performance against a specified peer group for total stockholder return during the three-year performance period) and service-based vesting conditions. During the first quarter of fiscal year 2024, the Human Capital Committee determined that the achievement of the performance objectives applicable to the PSU EBITDA 2023 and PSU Revenues 2023 objectives were 150 % of Target Goals. The value of these PSU awards above the Target Goals remain subject to additional performance requirements (i.e., the above target performance must be maintained in 2024 and 2025) and service-based vesting conditions. The performance period for those PSU awards up to the Target Goals ended on December 31, 2023, but remain subject to service-based vesting conditions. During the first quarter of fiscal year 2023, the Human Capital Committee determined that the achievement of the performance objective applicable to the PSU EBITDA 2022 objective did not meet the minimum threshold and the achievement of the performance objective applicable to the PSU Revenues 2022 objective was 83.2 % of Target Goals. The performance period for those awards ended on December 31, 2022 but remain subject to service-based vesting conditions. During the first quarter of fiscal year 2022, the Human Capital Committee determined that the achievement of the performance objective applicable to the PSU EBITDA 2021 objective was 64.6 % of target and the achievement of the performance objective applicable to the PSU Revenues 2021 objective was 126.2 % of target. In the first quarter of fiscal year 2022, the Human Capital Committee determined that the PSU Revenues and PSU EBITDA metrics will be measured separately when determining whether above-target performance has been maintained for future year performance. Such determination is applicable to the PSU grants made in fiscal years 2021 and in 2022. As a result, the 26.2 % above-target performance on PSU Revenues for fiscal year 2021 must have been maintained in fiscal years 2022 and 2023 in order for the corresponding above-target PSUs to vest in January 2024. During the first quarter of fiscal year 2024, the Human Capital Committee determined that there was no decline in performance with respect to PSU Revenues in fiscal years 2022 and 2023 and as a result, an amount equal to approximately 9.2 % of the target number of PSUs granted in January 2021 that were still outstanding vested in January 2024. Under the provision of ASC 718, Compensation—Stock Compensation , the Company determined that the 2021 PSUs were modified as of March 11, 2022 related to 205,834 above-target PSU Revenues metrics. The stock-based compensation expense for such modification was accounted for as a cancellation of the original award and the issuance of a new award using the fair value of the award on the date of modification. 97 Restricted Stock Units Restricted stock units are subject to the recipient’s continued service to the Company. RSUs are generally scheduled to vest over three years and are subject to the provisions of the agreement under the Plan. During the year ended December 31, 2024, the following activities involving RSUs occurred under the Plan: Number of RSUs Weighted Average Grant Date Fair Value Outstanding at January 1, 2024 18,238,623 $ 2.92 Granted 5,872,921 $ 4.27 Distributed ( 7,318,370 ) $ 3.41 Forfeited ( 4,975,728 ) $ 2.92 Outstanding at December 31, 2024 11,817,446 $ 3.28 As of December 31, 2024 , the total remaining unrecognized compensation cost related to RSUs amounted to $ 15.8 million, which will be amortized over the weighted-average remaining requisite service periods of 2.0 years. Stock Options During the year ended December 31, 2024, the following activities involving stock options occurred under the Plan: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at January 1, 2024 17,375,000 $ 6.00 Granted 3,058,018 $ 4.33 Forfeited — $ — Cancelled/Expired — $ — Outstanding at December 31, 2024 20,433,018 $ 5.75 7.4 years $ 3,233,999 Exercisable at December 31, 2024 3,604,999 $ 2.59 8.1 years $ 2,003,600 The fair value of the employee stock options was estimated using the following weighted average assumptions: Year Ended December 31, 2024 2023 2022 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 40.0 % 40.0 % 34.4 % Risk-free interest rate 4.7 % 3.5 % 2.9 % Expected term 4.5 years 6.4 years 6.5 years As of December 31, 2024 , the Company had approximately $ 6.5 million of total unrecognized compensation expense related to stock options, net of related forfeiture estimates, which the Company expects to recognize over a weighted-average period of approximately 2.4 years. The weighted average remaining contractual term of all options outstanding as of December 31, 2024 was 7.4 years. The intrinsic value of all outstanding options as of December 31, 2024 was $ 3.2 million based on the market price of the Company's common stock of $ 2.92 per share. As of December 31, 2024 , there were 3.6 million stock options that were exercisable. Employee Stock Purchase Plan The Company provides compensation benefits to employees under the amended 2020 Employee Stock Purchase Plan, (the “ESPP”). Employees have to satisfy one or more requirements before participating in the ESPP and not be subject to certain restrictions (e.g., “highly compensated employees” may not be granted rights to purchase stock under the ESPP). The administrator may approve offerings with a duration of not more than 27 months and may specify one or more shorter purchase periods within each offering (“Offering Period”). Each offering will have one or more purchase dates on which shares of the common stock will be purchased for the employees who are participating in the offering. The administrator, in its discretion, will determine the terms of offerings under the ESPP. Beginning with the July 1, 2024 purchase period, the ESPP permits participants to purchase shares of the common stock through payroll deductions with up to 10 % of their earnings. The purchase price of the shares will not be less than 90 % of the fair market value 98 of the common stock on the date of purchase. Payroll deductions shall be equal to at least one percent ( 1 %) of the participant’s compensation as of each payday of the Offering Period following the first date of each Offering Period (the “Enrollment Date”), but not more than the lesser of fifteen percent ( 15 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date or $ 10,000 per calendar year. For purchase periods prior to July 1, 2024, the ESPP permitted participants to purchase shares of the common stock through payroll deductions with up to 15 % of their earnings. The purchase price of the shares would not be less than 85 % of the lower of the fair market value of the common stock on the first day of an offering or on the date of purchase. Payroll deductions were equal to at least one percent ( 1 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date, but not more than the lesser of fifteen percent ( 15 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date or $ 25,000 per offering period. A participant may not transfer purchase rights under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP. In the event of a specified corporate transaction, such as a merger or change in control, a successor corporation may assume, continue or substitute each outstanding purchase right. If the successor corporation does not assume, continue or substitute for the outstanding purchase rights, the offering in progress will be shortened and a new exercise date will be set. The participants’ purchase rights will be exercised on the new exercise date and such purchase rights will terminate immediately thereafter. The ESPP will remain in effect until terminated by the administrator in accordance with the terms of the ESPP. The board of directors has the authority to amend, suspend or terminate the ESPP, at any time and for any reason. Employee Benefit Plans The Company sponsors 401(k) plans for certain employees who meet specified age and length of service requirements. The 401(k) plans include a deferral feature under which employees may elect to defer a portion of their salary, subject to Internal Revenue Service limitations. The Company provides a matching contribution based on a percentage of participating employees’ salaries and contributions made. Total contributions to the plan for the years ended December 31, 2024 , 2023, and 2022 were $ 11.7 million, $ 12.5 million, and $ 12.0 million, respectively. 13. Equity Class A Common Stock —The Company is authorized to issue 3,290,000,000 shares of Class A common stock with a par value of $ 0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share on each matter on which they are entitled to vote. At December 31, 2024, there were 320,773,096 shares of Class A common stock legally issued and outstanding. At December 31, 2023, there were 322,235,261 shares of Class A common stock legally issued and outstanding. Preferred stock —The Company is authorized to issue 10,000,000 shares of preferred stock with no par value. At December 31, 2024 and 2023, there was no preferred stock issued or outstanding. Common stock held in treasury, at cost — On November 9, 2021, the Company announced that the board of directors authorized a share repurchase program (the “2021 Share Repurchase Program”) pursuant to which the Company may repurchase up to $ 100.0 million of the Company’s Class A common stock. The 2021 Share Repurchase Program does not have an expiration date, but provides for suspension or discontinuation at any time. The 2021 Share Repurchase Program permits the repurchase of the Company’s Class A common stock on the open market and in other means from time to time. The timing and amount of any share repurchase is subject to prevailing market conditions, relevant securities laws and other considerations, and the Company is under no obligation to repurchase any specific number of shares. During the years ended December 31, 2024 and 2023 , the Company executed open market purchases of $ 34.1 million and $ 6.4 million, respectively, of the Company ’ s Class A common stock under the 2021 Share Repurchase Program. The Company did no t make any repurchases during the year ended December 31, 2022. As of December 31, 2024 , there remains $ 47.1 million of share repurchase availability under the 2021 Share Repurchase Program. In December 2023, the Company entered into a trading plan under Rule 10b5-1 of the Exchange Act authorizing the repurchase of shares of the Company’s Class A common stock. From January 2, 2024 to April 24, 2024, the Company purchased 4.8 million shares of Class A common stock. In June 2024, the Company entered into another trading plan under Rule 10b5-1 of the Exchange 99 Act authorizing the repurchase of shares of the Company’s Class A common stock. From June 26, 2024 to August 13, 2024, the Company purchased 4.0 million shares of Class A common stock. Warrants —As of December 31, 2024 and 2023, 11,244,988 public warrants were outstanding. Each whole warrant entitles the holder to purchase one whole share of the Company’s Class A common stock at an exercise price of $ 11.50 per share, subject to adjustment. Warrants may only be exercised for a whole number of shares of Class A common stock. The warrants became exercisable on November 27, 2020 and will expire on October 28, 2025, or earlier upon redemption or liquidation. As of December 31, 2024 and 2023, 7,333,333 private placement warrants were outstanding. The private placement warrants are identical to the public warrants, except that the private placement warrants and the Class A common stock issuable upon exercise of the private placement warrants were not transferable, assignable or salable until November 27, 2020, subject to certain limited exceptions. Additionally, the private placement warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the private placement warrants are held by someone other than the initial stockholders or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. The Company may call the warrants for redemption: For cash: • in whole and not in part; • at a price of $ 0.01 per warrant; • upon a minimum of 30 days’ prior written notice of redemption; and • if, and only if, the last reported closing price of the common stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, reclassifications, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. For cash or Class A common stock: • in whole and not in part; • at a price of $0.10 per warrant, provided that the warrant holders will be able to exercise their warrants prior to redemption and receive that number of shares of Class A common stock to be determined by reference to a table included in the warrant agreement, based on the redemption date and the fair market value of the Class A common stock; • upon a minimum of 30 days ’ prior written notice of redemption; • if, and only if, the last reported closing price of the common stock equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, reorganizations, reclassifications, recapitalizations and the like) on the trading day prior to the date on which the Company sends notice of redemption to the warrant holders; and • if, and only if, an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto is available throughout the 30-day period after which written notice of redemption is given, or the Company has elected to require the exercise of the warrants on a “cashless” basis. If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend. Additionally, in the event of a recapitalization, reorganization, merger or consolidation, the kind and amount of shares of stock or other securities or property (including cash) issuable upon exercise of the warrants may be adjusted. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants shares. Deconsolidation of ASL — As part of the deconsolidation of ASL, the $ 108.9 million noncontrolling interest was derecognized as reflected in the Consolidated Statements of Stockholders’ Equity. 100 Purchase of Interests —During the year ended December 31, 2022, the Company acquired a majority stake in an acquisition and received contributions from noncontrolling interest of $ 5.2 million. The fair value of the noncontrolling interest was $ 1.0 million. Dividend to noncontrolling interest —Certain of the Company’s subsidiaries may, from time to time, declare dividends. There were no dividends related to the Company’s minority interests during the years ended December 31, 2024 , 2023 and 2022. 14. Earnings Per Share The Company calculates earnings per share using a dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated by dividing net loss by the weighted-average shares of common stock outstanding without the consideration for potential dilutive shares of common stock. Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of outstanding performance stock units, restricted stock units, public and private placement warrants, the employee stock purchase plan and stock options. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding and the potential dilutive shares of common stock for the period determined using the treasury stock method. During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded. 101 The following is a reconciliation of basic and diluted net (loss) income per common share: Year Ended December 31, (in thousands, except share and earnings per share data) 2024 2023 2022 Basic earnings per share computation: Numerator: Net loss from continuing operations $ ( 378,404 ) $ ( 81,211 ) $ ( 1,418,652 ) Less: net income from continuing operations attributable to noncontrolling interest — 2,346 3,757 Net loss from continuing operations attributable to stockholders of Advantage Solutions Inc. $ ( 378,404 ) $ ( 83,557 ) $ ( 1,422,409 ) Net income from discontinued operations, net of tax $ 53,634 $ 20,829 $ 41,350 Less: net income (loss) from discontinued operations attributable to noncontrolling interest 2,192 594 ( 546 ) Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 51,442 $ 20,235 $ 41,896 Denominator: Weighted average common shares - basic 321,515,982 323,677,515 318,682,548 Basic loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc. $ ( 1.18 ) $ ( 0.26 ) $ ( 4.46 ) Basic earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 0.16 $ 0.06 $ 0.13 Diluted earnings per share computation: Numerator: Net loss from continuing operations $ ( 378,404 ) $ ( 81,211 ) $ ( 1,418,652 ) Less: net income from continuing operations attributable to noncontrolling interest — 2,346 3,757 Net loss from continuing operations attributable to stockholders of Advantage Solutions Inc. $ ( 378,404 ) $ ( 83,557 ) $ ( 1,422,409 ) Net income from discontinued operations, net of tax $ 53,634 $ 20,829 $ 41,350 Less: net income (loss) from discontinued operations attributable to noncontrolling interest 2,192 594 ( 546 ) Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 51,442 $ 20,235 $ 41,896 Denominator: Weighted average common shares - diluted 321,515,982 323,677,515 318,682,548 Diluted loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc. $ ( 1.18 ) $ ( 0.26 ) $ ( 4.46 ) Diluted earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc. $ 0.16 $ 0.06 $ 0.13 In accordance with the treasury stock method the weighted average shares outstanding assuming dilution include the incremental effect of stock-based awards, except when such effect would be antidilutive. Stock-based awards of 15.6 million, 6.9 million and 0.8 million weighted-average shares were outstanding for the years ended December 31, 2024 , 2023 and 2022, respectively, but were not included in the computation of diluted (loss) earnings per common share because the net loss position of the Company made them antidilutive. 15. Related Parties Conyers Park During the years ended December 31, 2024 and 2023, the Company had outstanding private placement warrants that allowed holders to purchase 7,333,333 shares of the Company’s common stock. Such private placement warrants were held by Conyers Park II Sponsor, LLC (“CP Sponsor”), a related party. Each whole warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price of $ 11.50 per share. 102 Investment in Unconsolidated Affiliates Transactions between the Company and ASL are considered to be related-party transactions from the date of deconsolidation. During the years ended December 31, 2024 and 2023, revenues from ASL were not material and as of December 31, 2023, accounts receivable from ASL were not material. During the years ended December 31, 2024 , 2023, and 2022, the Company recognized revenues of $ 9.3 million , $ 22.2 million, and $ 14.3 million, respectively, from the parent company of an investment in unconsolidated affiliates. Accounts receivable from this client were $ 0.9 million and $ 3.7 million as of December 31, 2024 and 2023, respectively. Loans to Karman Topco L.P. Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company, entered into loan agreements with Topco, pursuant to which Topco has borrowed various amounts totaling $ 6.0 million from Advantage Sales & Marketing Inc. to facilitate the payment to certain former employees for their equity interests in Topco. On September 1, 2020, Advantage Sales & Marketing Inc. entered into a loan agreement with Topco consolidating all outstanding amounts under the prior agreements. Pursuant to such loan agreement Topco borrowed $ 6.0 million at an interest rate of 0.39 % per annum. This loan matured on December 31, 2023 and was pre-payable at any time without penalty. During the first quarter of fiscal year 2024, the parties entered into a new loan agreement for $ 6.3 million to refinance the matured loan. The loan bears interest at a rate of 10.09 % per annum and matures on December 31, 2026 . The loan is pre-payable at any time without penalty. Other related parties Beginning February 2023, an officer of the Company has served as a member of the board of directors of a client of the Company. The Company recognized revenues from such client of $ 4.9 million and $ 4.4 million during the years ended December 31, 2024 and 2023, respectively. Accounts receivable from this client were $ 0.4 million and $ 0.6 million as of December 31, 2024 and 2023, respectively. Beginning February 2023, an officer of the Company has served as a member of the board of directors of a consultant of the Company. The Company recognized $ 0.2 million of expense from such consultant during the year ended December 31, 2024 . The Company did no t recognize any expense from such consultant during the year ended December 31, 2023. The Company did no t owe any amounts to this consultant as of December 31, 2024 and 2023. Beginning July 2023, a member of the board of directors of the Company has served as an officer of a client of the Company. The Company recognized $ 7.9 million and $ 3.3 million of revenues from such client during the years ended December 31, 2024 and 2023 , respectively. Accounts receivable from this client were $ 0.2 million and $ 0.5 million as of December 31, 2024 and 2023 , respectively. 103 16. Income Taxes The benefit from income taxes is as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Current tax expense Federal $ 916 $ 24,805 $ 15,973 State 2,004 9,784 5,337 Foreign 9,605 13,456 13,941 Total current tax expense 12,525 48,045 35,251 Deferred tax benefit Federal ( 59,986 ) ( 66,730 ) ( 130,718 ) State ( 14,245 ) ( 16,230 ) ( 59,537 ) Foreign ( 1,081 ) ( 2,733 ) ( 3,438 ) Total deferred tax benefit (75,312 ) (85,693 ) (193,693 ) Total benefit from income taxes $ ( 62,787 ) $ ( 37,648 ) $ ( 158,442 ) A reconciliation of the Company's effective income tax rate as compared to the federal statutory income tax rate is as follows: Year Ended December 31, 2024 2023 2022 Statutory U.S. rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 2.2 % 4.3 % 2.7 % Foreign tax, net of federal tax benefit ( 0.8 %) ( 2.9 %) ( 0.2 %) Deconsolidation of subsidiaries 0.0 % 14.0 % 0.0 % Goodwill impairment ( 6.2 %) 0.0 % ( 13.5 %) Equity-based compensation 0.1 % ( 2.3 %) 0.0 % Work opportunity tax credit 0.6 % 2.5 % 0.2 % Disallowed executive compensation ( 0.6 %) ( 1.8 %) ( 0.2 %) Meals and entertainment ( 0.5 %) ( 2.0 %) ( 0.1 %) Contingent consideration fair value adjustment 0.0 % ( 0.4 %) 0.0 % Fair value adjustment of warrant liability 0.0 % 0.1 % 0.3 % Other ( 1.6 %) ( 0.8 %) ( 0.2 %) Effective tax rate 14.2 % 31.7 % 10.0 % The geographic components of loss before income taxes are as follows: Year Ended December 31, (in thousands) 2024 2023 2022 U.S. sources $ ( 452,261 ) $ ( 217,097 ) $ ( 1,598,544 ) Non-U.S. sources 11,070 98,238 21,450 Loss from continuing operations before income taxes $ ( 441,191 ) $ ( 118,859 ) $ ( 1,577,094 ) 104 Net deferred tax liabilities consist of the following: December 31, (in thousands) 2024 2023 Deferred tax assets Accrued liabilities $ 63,915 $ 82,600 Interest expense 88,466 71,478 Right-of-use liabilities 9,517 12,748 Net operating losses 2,855 5,471 Acquisition and divestiture related expenses 5,460 6,511 Capitalized research and development costs 2,919 4,849 Contingent consideration — 1,662 Insurance reserves 2,599 2,204 Acquired intangible assets, including goodwill 1,419 1,302 Other 2,977 6,274 Total deferred tax assets 180,127 195,099 Deferred tax liabilities Acquired intangible assets, including goodwill 299,981 357,657 Interest rate collars and caps 414 6,799 Right-of-use assets 6,465 8,955 Debt issuance costs 6,359 7,242 Reorganization expenses — 3,276 Other 7,861 9,561 Total deferred tax liabilities 321,080 393,490 Less: deferred income tax asset valuation allowances ( 3,199 ) ( 3,491 ) Net deferred tax liabilities $ 144,152 $ 201,882 December 31, (in thousands) 2024 2023 Reported as: Noncurrent deferred tax asset $ 2,737 $ 2,254 Noncurrent deferred tax liabilities 146,889 204,136 Net deferred tax liabilities $ 144,152 $ 201,882 Income tax expense from discontinued operations was $ 41.3 million, $ 8.6 million and $ 13.1 million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively. Income tax expense for the fiscal years ended December 31, 2024, 2023 and 2022 was impacted primarily by the sale of the divested entities and changes in the income before income taxes from discontinued operations. T On August 16, 2022, the U.S. government enacted the Inflation Reduction Act, which, among other things, imposes a new corporate alternative minimum tax and an excise tax on stock buybacks. As of December 31, 2024, the Company has determined that the Act had no tax impacts on its consolidated financial statements. The Organization for Economic Co-operation and Development (“OECD”) published its model rules “Tax Challenges Arising From the Digitalization of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)” which established a global minimum corporate tax rate of 15 % for certain multinational enterprises. Many countries have implemented or are in the process of implementing the Pillar Two legislation, which will apply to the Company. While the Company does not currently estimate a material impact to the consolidated financial statements, the Company continues to monitor the impact as countries implement legislation and the OECD provides additional guidance. The Company held cash and cash equivalents in foreign subsidiaries of $ 65.0 million and $ 44.0 million as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the undistributed earnings of the Company’s foreign subsidiaries was $ 130.7 million and $ 125.1 million, respectively. The Company has not recorded a deferred tax liability related to undistributed earnings of its foreign subsidiaries as of December 31, 2024 , except for a $ 0.6 million deferred tax liability for unremitted earnings in Canada with respect to which the 105 Company no longer has an indefinite reinvestment assertion. Taxes have not been provided on the remaining $ 114.2 million of undistributed foreign earnings. The incremental tax liability associated with these earnings is expected to be immaterial. The Company evaluates its deferred tax assets, including a determination of whether a valuation allowance is necessary, based upon its ability to utilize the assets using a more likely than not analysis. Deferred tax assets are only recorded to the extent that they are realizable based upon past and future income. The Company’s valuation allowances on its deferred tax assets as of December 31, 2024 , 2023 and 2022 were $ 3.2 million, $ 3.5 million and $ 3.6 million, respectively. As of December 31, 2024 , the Company had $ 3.6 million of United States Federal Net Operating Losses (“NOL”), $ 30.1 million state NOL, and $ 3.9 million foreign NOL. The change of ownership provisions of the Tax Reform Act of 1986 may limit utilization of a portion of the Company’s domestic NOL to future periods. The United States Federal NOL expires in tax year 2037, $17.9 million of the state NOL expires between tax years 2024 and 2043 and the remaining $12.2 million of the state NOL carry forward indefinitely. Foreign NOL of $1.2 million expires between tax years 2024 and 2034 and the remaining $2.7 million of the foreign NOL carry forward indefinitely. Uncertain Tax Positions The Company accounts for uncertain tax positions when it is more likely than not that the tax position will not be sustained on examination by the taxing authorities, based on the technical merits of the position. As of December 31, 2024 , 2023, and 2022, the Company’s unrecognized tax benefits were $ 2.9 million, $ 2.9 million and $ 0.6 million, respectively. The Company recorded uncertain tax positions related to capitalizing interest to inventory and California research and development credits for the year ended December 31, 2024 . $ 2.2 million out of the $ 2.9 million of the unrecognized tax benefits as of December 31, 2024 would be included in the effective tax rate if recognized in future periods. December 31, (in thousands) 2024 2023 2022 Beginning unrecognized tax benefits $ 2,887 $ 560 $ 563 Increases for tax positions related to prior years — 2,350 — Decreases due to lapsed statutes of limitations ( 29 ) ( 23 ) ( 3 ) Ending unrecognized tax benefits $ 2,858 $ 2,887 $ 560 The Company is unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. The Company files tax returns in the United States, various states and foreign jurisdictions. With few exceptions, as of December 31, 2024, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2020. The Company does not have any material ongoing income tax audits. The Company has elected to classify interest and penalties as components of tax expense. These amounts were $ 1.4 million, $ 0.9 million and $ 0.2 million for the years ended December 31, 2024 , 2023 and 2022, respectively. 17. Operating Segments and Geographic Information Effective January 1, 2024, the Company revised its reportable segments to align with the Company’s business strategy, and the manner in which the Chief Executive Officer, the Company's CODM , assesses the performance and makes decisions regarding the allocation of resources for the Company. The Company’s revised reportable segments consist of Branded Services, Experiential Services, and Retailer Services. The reportable segments reported below are the segments of the Company for which separate financial information is available. Through the Company's Branded Services segment, the Company offers capabilities in brokerage, branded merchandising and omni-commerce marketing services to consumer goods manufacturers. Through the Company's Experiential Services segment, the Company expands the reach of consumer brands and retailer products to convert shoppers into buyers through sampling and product demonstration programs executed in-store and online. Through the Company's Retailer Services segment, the Company provides retailers with end-to-end advisory, retailer merchandising, and agency expertise to drive sales. The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; therefore, no additional information is produced or included herein. Segment operating income is the measure utilized by the CODM to assess performance and allocate resources. When evaluating the Company’s financial performance, the CODM regularly reviews revenues, compensation and benefits, reimbursable expenses and other segment items. Compensation costs are key metrics reviewed by the CODM when allocating resources and assessing performance as the Company depends significantly on human capital to deliver services to its clients. Reimbursable expenses are also 106 reviewed regularly by the CODM as revenue included in the CODM packages are net of these expenses. The accounting policies for the segments are consistent with those described Note 1— Organization and Significant Accounting Policies. Revenues and significant expenses by segment are as follows: Year Ended December 31, 2024 (in thousands) Branded Services Experiential Services Retailer Services Total Company Revenues $ 1,306,336 $ 1,295,029 $ 964,959 $ 3,566,324 Less: Compensation and benefits 719,089 701,906 619,387 2,040,382 Reimbursable expenses 171,766 349,991 — 521,757 Other segment items 1 330,736 201,149 289,624 821,509 Impairment of goodwill and indefinite-lived asset 275,170 — — 275,170 Depreciation and amortization 130,212 41,728 32,613 204,553 Income from equity method investments ( 2,064 ) — — ( 2,064 ) Total segment operating expenses from continuing operations 1,624,909 1,294,774 941,624 3,861,307 Total segment operating (loss) income from continuing operations $ ( 318,573 ) $ 255 $ 23,335 $ ( 294,983 ) Year Ended December 31, 2023 (in thousands) Branded Services Experiential Services Retailer Services Total Company Revenues $ 1,758,417 $ 1,159,449 $ 982,259 $ 3,900,125 Less: Compensation and benefits 1,009,334 638,081 630,484 2,277,899 Reimbursable expenses 179,029 307,610 — 486,639 Other segment items 1 417,320 173,879 304,334 895,533 Impairment of goodwill and indefinite-lived asset 43,500 — — 43,500 Depreciation and amortization 140,932 36,584 31,340 208,856 Deconsolidation of European joint venture ( 58,891 ) — — ( 58,891 ) Total segment operating expenses from continuing operations 1,731,224 1,156,154 966,158 3,853,536 Total segment operating income from continuing operations $ 27,193 $ 3,295 $ 16,101 $ 46,589 Year Ended December 31, 2022 (in thousands) Branded Services Experiential Services Retailer Services Total Company Revenues $ 1,764,076 $ 904,230 $ 978,036 $ 3,646,342 Less: Compensation and benefits 994,007 523,517 629,162 2,146,686 Reimbursable expenses 178,474 217,690 — 396,164 Other segment items 1 370,628 142,565 292,810 806,003 Impairment of goodwill and indefinite-lived asset 831,008 354,452 387,063 1,572,523 Depreciation and amortization 144,354 37,906 33,786 216,046 Loss on divestiture 2,863 — — 2,863 Total segment operating expenses from continuing operations 2,521,334 1,276,130 1,342,821 5,140,285 Total segment operating loss from continuing operations $ ( 757,258 ) $ ( 371,900 ) $ ( 364,785 ) $ ( 1,493,943 ) 107 (1) The “other segment items” category primarily consists of costs incurred in the execution of service obligations, including supplies, technology, and other direct expenses such as travel. These costs align with the segment-level information regularly provided to the CODM and represent the difference between revenue and the significant expense categories above in determining segment profitability. Revenues by geographic region are as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Revenues North America $ 3,412,947 $ 3,393,718 $ 3,176,774 Asia Pacific 145,574 125,569 96,075 Europe 7,803 6,472 2,010 European Joint Venture (1) — 374,366 371,483 Total revenue $ 3,566,324 $ 3,900,125 $ 3,646,342 (1) The Company’s European joint venture was deconsolidated during fiscal year 2023. For further details, see Note 2 — Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions. North American revenues were primarily services provided in the U.S. representing revenues of $ 3.1 billion, $ 3.2 billion, and $ 3.0 billion during the years ended December 31, 2024, 2023, and 2022, respectively. The majority of the Company’s long-lived assets are primarily located in North America. Long-lived assets located in all other geographic regions as of December 31, 2024 and 2023 are not material. North American long-lived assets were primarily in the U.S. representing long-lived assets of $ 97.1 million and $ 64.1 million as of December 31, 2024 and 2023, respectively. The classification of “Asia Pacific” primarily includes the Company’s operations in Japan, South Korea and Taiwan. The classification of “Europe” primarily includes the Company’s operations in Spain, France and Sweden. The Company does not disclose total assets by segment as it is not provided to the CODM. 18. Commitments and Contingencies Litigation The Company is involved in various legal matters that arise in the ordinary course of its business. Some of these legal matters purport or may be determined to be class and/or representative actions, or seek substantial damages, or penalties. The Company has accrued amounts in connection with certain legal matters, including with respect to certain of the matters described below. There can be no assurance, however, that these accruals will be sufficient to cover such matters or other legal matters or that such matters or other legal matters will not materially or adversely affect the Company’s financial position, liquidity, or results of operations. Employment Matters The Company has also been involved in various litigation, including purported class or representative actions with respect to matters arising under the California Labor Code and Private Attorneys General Act. The Company has retained outside counsel to represent it in these matters and is vigorously defending its interests. Commercial Matters The Company has also been involved in various litigation matters and arbitrations with respect to commercial matters arising with clients, vendors and third-party sellers of businesses. The Company has retained outside counsel to represent it in these matters and is vigorously defending its interests. Legal Matters Related to Take 5 The Company voluntarily disclosed to the United States Attorney’s Office and the Federal Bureau of Investigation certain misconduct occurring at Take 5, a line of business that the Company closed in July 2019. The Company intends to cooperate in this and any other governmental investigations that may arise in connection with the Take 5 Matter. At this time, the Company cannot predict the ultimate outcome of any investigation related to the Take 5 Matter and is unable to estimate the potential impact such an investigation may have on the Company. In August 2019, as a result of the Take 5 Matter, the Company provided a written indemnification claim notice to the sellers of Take 5 (the “Take 5 Sellers”) seeking monetary damages (including interest, fees and costs) based on allegations of breach of the asset purchase agreement, as well as fraud. The Company and the Take 5 Sellers engaged in arbitration proceedings. In October 2022, the arbitrator made a final award in the Company’s favor. The Company is actively pursuing the collection of this award. The Company is currently unable to estimate if or when it will be able to collect any amounts 108 associated with this arbitration. The Take 5 Matter may result in additional litigation against the Company, including lawsuits from clients, or governmental investigations, which may expose the Company to potential liability in excess of the amounts being offered by the Company as refunds to Take 5 clients. The Company is currently unable to determine the amount of any potential liability, costs or expenses (above the amounts already being offered as refunds) that may result from any lawsuits or investigations associated with the Take 5 Matter or determine whether any such issues will have any future material adverse effect on the Company’s financial position, liquidity, or results of operations. Although the Company has insurance covering certain liabilities, the Company cannot assure that the insurance will be sufficient to cover any potential liability or expenses associated with the Take 5 Matter. Surety Bonds In the ordinary course of business, the Company is required to provide financial commitments in the form of surety bonds to third parties as a guarantee of its performance on and its compliance with certain obligations. If the Company were to fail to perform or comply with these obligations, any draws upon surety bonds issued on its behalf would then trigger the Company’s payment obligation to the surety bond issuer. The Company has outstanding surety bonds issued for its benefit of $ 15.0 million and $ 16.0 million as of December 31, 2024 and 2023, respectively. 109 SCHEDULE I ADVANTAGE SOLUTIONS INC. CONDENSED REGISTRANT ONLY FINANCIAL INFORMATION CONDENSED BALANCE SHEETS December 31, (in thousands) 2024 2023 ASSETS Investment in subsidiaries $ 748,817 $ 1,106,025 Total assets $ 748,817 $ 1,106,025 LIABILITIES AND STOCKHOLDERS' EQUITY Warrant liability $ 82 $ 667 Total liability 82 667 Equity attributable to stockholders of Advantage Solutions Inc. Common stock, $ 0.0001 par value, 3,290,000,000 shares authorized; 320,773,096 and 322,235,261 shares issued and outstanding as of December 31, 2024 and 2023, respectively 32 32 Additional paid-in capital 3,466,221 3,449,261 Accumulated deficit ( 2,641,612 ) ( 2,314,655 ) Loans to Karman Topco L.P. ( 7,029 ) ( 6,387 ) Accumulated other comprehensive loss ( 15,861 ) ( 3,944 ) Treasury stock, at cost; 12,400,075 and 3,600,075 shares as of December 31, 2024 and 2023, respectively ( 53,016 ) ( 18,949 ) Total equity attributable to stockholders of Advantage Solutions Inc. 748,735 1,105,358 Total liabilities and stockholders’ equity $ 748,817 $ 1,106,025 See Notes to Condensed Registrant Only Financial Statements 110 SCHEDULE I ADVANTAGE SOLUTIONS INC. CON DENSED REGISTRANT ONLY FINANCIAL INFORMATION CONDENSED STATEMENTS OF OPERATIONS Year Ended December 31, (in thousands) 2024 2023 2022 Revenues $ — $ — $ — Cost of revenues (exclusive of depreciation and amortization shown separately below) — — — Selling, general, and administrative expenses — — — Impairment of goodwill and indefinite-lived asset — — — Gain on deconsolidation of subsidiaries — — — Loss on divestitures — — — Depreciation and amortization — — — Income from equity method investments — — — Total operating expenses — — — Operating income — — — Other income: Change in fair value of warrant liabilities ( 584 ) ( 286 ) ( 21,236 ) Interest expense, net — — — Total other income ( 584 ) ( 286 ) ( 21,236 ) Income before income taxes and equity in net income of subsidiaries 584 286 21,236 Provision for income taxes — — — Net income before equity in net income of subsidiaries 584 286 21,236 Equity in net loss of subsidiaries ( 327,546 ) ( 63,608 ) ( 1,401,749 ) Net loss attributable to subsidiaries ( 326,962 ) ( 63,322 ) ( 1,380,513 ) Other comprehensive (loss) income, net of tax equity in comprehensive (loss) income of subsidiaries ( 9,485 ) 5,817 ( 14,370 ) Total comprehensive loss $ ( 336,447 ) $ ( 57,505 ) $ ( 1,394,883 ) See Notes to Condensed Registrant Only Financial Statements 111 ADVANTAGE SOLUTIONS INC. CONDENSED REGISTRANT ONLY FINANCIAL INFORMATION NOTES TO THE CONDENSED REGISTRANT ONLY FINANCIAL STATEMENTS 1. Basis of Presentation In the registrant company only financial statements, Advantage Solutions Inc.’s (the “Registrant”) investment in subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries during the years ended December 31, 2024 and 2023. The accompanying condensed registrant company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X. A condensed statement of cash flows was not presented because Registrant’s operating activities have no cash impact and there were no investing or financing cash flow activities during the years ended December 31, 2024, 2023, and 2022. This information should be read in conjunction with the accompanying Consolidated Financial Statements. 2. Debt Restrictions Pursuant to the terms of the Senior Secured Credit Facilities and the Notes discussed in Note 8— Debt , of the Notes to the Consolidated Financial Statements, the Registrant’s subsidiaries have restrictions on their ability to pay dividends or make intercompany loans and advances to the Registrant. Since the restricted net assets of the Registrant’s subsidiaries exceed 25 % of the consolidated net assets of the Registrant and its subsidiaries, the accompanying condensed registrant company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X. Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company (the “Borrower”) has obligations under the Term Loan Facility that are guaranteed by Karman Intermediate Corp. (“Holdings”) and all of the Borrower’s direct and indirect wholly owned material U.S. subsidiaries (as defined, subject to certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality thresholds of aggregate assets and revenues of Canadian subsidiaries) (the “Guarantors”). The Term Loan Facility is secured by a lien on substantially all of Holdings’, the Borrower’s and the Guarantors’ assets (subject to certain permitted exceptions). The Term Loan Facility has a first-priority lien on the fixed asset collateral (equal in priority with the liens securing the Notes) and a second-priority lien on the current asset collateral (second in priority to the liens securing the Revolving Credit Facility), in each case, subject to other permitted liens. The Borrower will be required to prepay the Term Loan Facility with 100 % of the net cash proceeds of certain asset sales (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios) and subject to certain reinvestment rights, 100 % of the net cash proceeds of certain debt issuances and 50 % of excess cash flow (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios). The Term Loan Facility contains certain customary negative covenants, including, but not limited to, restrictions on the ability of Holdings and that of its restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates. The Term Loan Facility provides that, upon the occurrence of certain events of default, the Company’s obligations thereunder may be accelerated. Such events of default will include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, change of control and other customary events of default. 112 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None